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India's fiercely competitive airlines have teamed up to oppose the entry of another new airline.
IndiGo, Jet Airways, SpiceJet and GoAir have asked the aviation regulator to deny an airline permit to Tata SIA Airlines Ltd, ajoint venture between Tata Sons and Singapore Airlines. These airlines, under the banner of the Federation of Indian Airlines (FIA), have argued in a letter to the Directorate General of Civil Aviation (DGCA) that foreign airlines can invest only in existing ones and not startups according to the previous government's change in policy in September 2012. The May 23 FIA letter addressed to DGCA head Prabhat Kumar has been reviewed by ET. In February, FIA tried to block another joint venture by the Tatas, a no-frills airline with Malaysia's AirAsia Bhd and Arun Bhatia of Telestra Tradeplace. The DGCA dismissed that objection--which the airline lobby had again based on the same policy interpretation--ruling that the government had made it clear that the policy was meant for both existing and startup airlines.
AirAsia India started operations on June 12. AirAsia Bhd owns 49% of the venture and the remaining 51% is held by Tata Sons (30%) and Telestra (21%). ADGCA official said the regulator will dispose of the latest objection by FIA in a day or two. Another DGCA official said the argument in the FIA letter, filed in response to a public notice seeking objections or suggestions from the public and all the persons likely to be affected by the grant of permit to Tata-SIA, does not hold as the government made its stand very clear. A spokesman for Tata SIA, in which the Tatas own 51% and Singapore Airlines the rest, said his company was aware of the development. He had no further comment.
Sanjiv Kapoor, chief operating officer, SpiceJet, said the view of all FIA member airlines on the issue is represented by the grouping. Spokespersons for Indi-Go and Jet had no comment. A spokesman for promoters of GoAir, the Wadias, said a representative for the airline was unavailable. Apart from the interpretation of policy, FIA objected to the airline venture on four other counts: The substantive and efective control (of Tata-SIA) is not vested in Indian hands; the mandate of Schedule XI of Aircraft rules, 1937 (related to minimum airworthiness, operations and other general requirements for grant of air permit) hasn't been satisfied; foreign airlines are not entitled to use sensitive airports; and the matter is sub judice in the Delhi High Court. The second DGCA official said three cases against these new airline ventures — two against AirAsia and one against Tata-SIA by the FIA — are pending in the Delhi High Court. The court will hear all these cases and a separate one filed by BJP leader Subramanian Swamy against AirAsia on July 11.
"All these cases are being considered as one since the objections are all the same," said the DGCA official. Tata-SIA plans to start operations by early November. It received permission in April from the aviation ministry to start operations. The entry of AirAsia and Tata-SIA is expected to intensify competition in the struggling airline Industry. Indian airlines have posted accumulated losses of $10 billion and their debt has risen to nearly $20 billion, according to aviation consultancy Capa. Besides FIA's letter, DGCA received five responses to its public notice on Tata-SIA. Two were from individuals favouring a permit to the venture. Two were representations asking DGCA to fix norms for hiring pilots. One objection came from a Mr Jain who said the DGCA should not permit investment in a startup airline.
IndiGo, Jet Airways, SpiceJet and GoAir have asked the aviation regulator to deny an airline permit to Tata SIA Airlines Ltd, ajoint venture between Tata Sons and Singapore Airlines. These airlines, under the banner of the Federation of Indian Airlines (FIA), have argued in a letter to the Directorate General of Civil Aviation (DGCA) that foreign airlines can invest only in existing ones and not startups according to the previous government's change in policy in September 2012. The May 23 FIA letter addressed to DGCA head Prabhat Kumar has been reviewed by ET. In February, FIA tried to block another joint venture by the Tatas, a no-frills airline with Malaysia's AirAsia Bhd and Arun Bhatia of Telestra Tradeplace. The DGCA dismissed that objection--which the airline lobby had again based on the same policy interpretation--ruling that the government had made it clear that the policy was meant for both existing and startup airlines.
AirAsia India started operations on June 12. AirAsia Bhd owns 49% of the venture and the remaining 51% is held by Tata Sons (30%) and Telestra (21%). ADGCA official said the regulator will dispose of the latest objection by FIA in a day or two. Another DGCA official said the argument in the FIA letter, filed in response to a public notice seeking objections or suggestions from the public and all the persons likely to be affected by the grant of permit to Tata-SIA, does not hold as the government made its stand very clear. A spokesman for Tata SIA, in which the Tatas own 51% and Singapore Airlines the rest, said his company was aware of the development. He had no further comment.
Sanjiv Kapoor, chief operating officer, SpiceJet, said the view of all FIA member airlines on the issue is represented by the grouping. Spokespersons for Indi-Go and Jet had no comment. A spokesman for promoters of GoAir, the Wadias, said a representative for the airline was unavailable. Apart from the interpretation of policy, FIA objected to the airline venture on four other counts: The substantive and efective control (of Tata-SIA) is not vested in Indian hands; the mandate of Schedule XI of Aircraft rules, 1937 (related to minimum airworthiness, operations and other general requirements for grant of air permit) hasn't been satisfied; foreign airlines are not entitled to use sensitive airports; and the matter is sub judice in the Delhi High Court. The second DGCA official said three cases against these new airline ventures — two against AirAsia and one against Tata-SIA by the FIA — are pending in the Delhi High Court. The court will hear all these cases and a separate one filed by BJP leader Subramanian Swamy against AirAsia on July 11.
"All these cases are being considered as one since the objections are all the same," said the DGCA official. Tata-SIA plans to start operations by early November. It received permission in April from the aviation ministry to start operations. The entry of AirAsia and Tata-SIA is expected to intensify competition in the struggling airline Industry. Indian airlines have posted accumulated losses of $10 billion and their debt has risen to nearly $20 billion, according to aviation consultancy Capa. Besides FIA's letter, DGCA received five responses to its public notice on Tata-SIA. Two were from individuals favouring a permit to the venture. Two were representations asking DGCA to fix norms for hiring pilots. One objection came from a Mr Jain who said the DGCA should not permit investment in a startup airline.
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