SIA and Tata to set up airline in India
SINGAPORE Airlines (SIA) and India's Tata Sons will jointly invest US$100 million (S$126 million) to set up a full-service airline based in New Delhi, the companies said in a statement yesterday.
Tata Sons, the Indian owner of Jaguar Land Rover and businesses ranging from hotels to software, will own 51 per cent and SIA will own the remainder in the joint venture.
The investment will be funded by shareholders in proportion to their respective shareholdings, the statement said.
"The Indian aviation industry is projected to experience future high growth rates," SIA said.
"The recent Indian government decision to allow foreign airlines to invest up to 49 per cent in Indian carriers provides an opportunity for SIA to participate directly in one of the fastest-growing and largest aviation markets globally."
Prime Minister Manmohan Singh's government last year allowed overseas carriers to buy holdings of as much as 49 per cent in local companies.
Following that, AirAsia formed a venture with Mumbai-based Tata Group to set up a local low-fare airline.
Mr Prasad Menon, chairman of the proposed new carrier, said: "It is Tata Sons' evaluation that civil aviation in India offers sustainable growth potential. We now have the opportunity to launch a world-class full-service airline in India."
AFP, BLOOMBERG, REUTERS