NEW DELHI, March 6 – India’s Aviation Ministry is said to have opposed AirAsia’s proposed joint venture to launch a new airline in India, stating the new Foreign Direct Investment (FDI) rule is meant for existing carriers only, the Press Trust of India reported.
The Foreign Investment Promotion Board (FIPB) is slated to take up Air Asia’s joint venture (JV) proposal with the Tatas and Arun Bhatia at a meeting today.
According to the report, the ministry is understood to have expressed its reservations in a note to FIPB, saying the new company should have been formed before seeking the government’s nod.
The ministry’s opposition comes amid reports in a section of the media that AirAsia Group Chief Executive Officer, Tan Sri Tony Fernandes was keen to kick off his airline in the country as early as May-June, instead of his earlier plan of towards the year-end.
It is noted that a day after AirAsia announced its 49:30:21 joint venture with the Tatas and Telestra Tradeplace promoted by Delhi-based Arun Bhatia late last month, Aviation Minister Ajit Singh had expressed his displeasure, saying he would have been happy had the Tatas chosen to launch their own airline.
Earlier, ministry sources said FDI rules allowing up to 49 per cent investment by a foreign airline in domestic carriers, is for existing airlines and not for a new company.
Over the weekend, Tata Group patriarch Ratan Tata, who is an avowed aviation buff and whose group is credited with bringing the first airline into India way back in October 1938, met Singh, for reportedly discussing the JV plan.
In a related development, Fernandes said he had chosen the head for the JV. “I have selected the Chief Executive Officer for AirAsia India. A very smart boy from the South, Chennai. An amazing curriculum vitae (CV). Will impress all,” Fernandes tweeted without naming the person.
— BERNAMA
