New Delhi: Tata Sons and Singapore Airlines, who plan to start a new full-service airline in India, will not compete against each other only in the full-service segment of the airline business. The specification in the non-compete clause of their MoU for formation of the JV company by Tata and SIA allows for Tata Sons to operate a low-cost airline in partnership with Malaysian budget carrier AirAsia.
“The parties agree that except as permitted under a definitive agreement, both parties as long as they are partners in the JV company shall not compete with the JV company with regard to the business of domestic and international full-service passenger airlines,” a copy of the MoU reviewed by FE stated.
After Tata Sons made a surprise announcement on September 19 about its intentions to launch a full-service airline with SIA, consultants raised questions on conflict of interest since the $100-billion conglomerate had already entered into a partnership with AirAsia for a low-cost airline. Many people in the industry also hinted that the Tata-AirAsia partnership was in trouble.
Read news in full 18/10/13 Debabrata Das/Ashish Sinha/Financial Express
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