AirAsia India unlikely to start flying before summer 2014

NEW DELHI: AirAsia India, which was initially optimistic about starting operations by October this year and then January 2014, may now need to wait until summer 2014 before it can start flying, according to media reports.

AirAsia India is a 49:30:21 joint venture between AirAsia Bhd, Tata Sons and Telestra Tradeplace.

Tata Sons later entered into another joint venture with Singapore Airlines Tata-SIA to create a full-fledged airline in India. In Tata-SIA, Tata Sons is the majority shareholder with a 51% stake.

The Foreign Investment Promotion Board (FIPB) has cleared both airline ventures.

FirstPost.com reported that Tata-SIA has applied to the Ministry of Civil Aviation for a no-objection certificate (NoC), giving mandatory details such as number of directors on its board and seeking security clearance for them from the Ministry of Home Affairs.

AirAsia India had already secured the NoC earlier. However, it has still not been granted the operating permit and is therefore unlikely to take to the skies before the summer schedule of 2014, reported the online business daily.

The report quoted an unnamed senior official in the ministry confirming both these developments to the daily, saying the NoC application from Tata-SIA has been received over the last few days.

According to the report, there has been much speculation about the apparently fast-track treatment that the Tata-SIA venture has received from various government departments against the rather slow pace of clearances being accorded to AirAsia India.

The NoC for Tata-SIA may also arrive fairly quickly. Thereafter, it will approach aviation regulator DGCA for a flying permit. For AirAsia India, though, delays abound.

Now, another hitch could be the voluntary retirement that current Director General of Civil Aviation has taken his last day in office is Dec 31. And until now, there has been no decision on a successor, said Firstpost.com.

So it is possible that AirAsia's launch plans get further delayed since its operating permit still needs to be issued by the DGCA. The official quoted earlier said there is a long-drawn procedure for issuing a Scheduled Operators' Permit (SOP), the report said.

The two ventures are expected to address widely different segments of the domestic aviation business AirAsia India would be an ultra low-cost carrier, based out of Chennai, whereas Tata-SIA would be a full service carrier, based in New Delhi.

The report also said that there has been persistent speculation over the Tatas pulling out of AirAsia India since the two business models are widely divergent and may not offer synergies.

This speculation has been denied by the Tatas and Civil Aviation Minister Ajit Singh had earlier clarified that no aviation rule has been violated by the Tatas in having a stake in two separate airline ventures.

The ministry official quoted earlier said in case the Tatas were to pull out, the entire process would have to be cancelled. "The FIPB approval was given based on the shareholding structure submitted at that time. If there is going to be a change in shareholding, a fresh FIPB approval will of course be needed," he said – Bernama.