New Delhi: Singapore Airlines (SIA) and former Ratan Tata, former chairman of Tata Group, rekindled talks to set up a joint venture domestic air carrier way back in April-May last year, when the government announced it was planning to liberalise foreign direct investment rules in the aviation sector.
Sources in the know say SIA, being wooed by several Indian groups, made the first move by approaching the Tatas, its old choice for a joint venture. In 1995, now SIA Chairman Stephen Lee Ching Yen, close to Ratan Tata, as a manager in the airlines was closely involved in an aborted Tata-SIA venture for setting up a domestic airline.
The Tata Group was set to hold a 40 per cent stake in that proposed carrier. However, strong opposition from the country’s private airlines made the Union government ask the Tatas to bring down SIA’s share first to half and then to 40 per cent. Later, the government succumbed to the opposing airlines and decided not to allow foreign investment in Indian airlines.
For the current venture, talks between SIA and the Tatas acquired steam only after September, when the government allowed foreign airlines to acquire up to 49 per cent equity in Indian airlines. Talks with AirAsia Chief Tony Fernandes also began simultaneously. Both SIA and AirAsia were aware of the Tatas’ negotiations with them.
Read News In full 21/09/13 Surajeet Das Gupta & Sharmistha Mukherjee/Business Standard
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