Tata and Singapore Airlines ink MoU to set up a new full-service airline
A Memorandum of Understanding (MoU) was signed between Tata Sons and Singapore Airlines to enter into a joint venture to set up a full-service airline. Both the partners have applied for Foreign Investment Promotion Board approval.
The initial investment in the project is estimated to be $100 million, with Tata Sons injecting $51 million for a 51% stake and Singapore Airlines pumping in $49 million for the remaining 49%.
This is the third proposal in the aviation sector since the Government permitted 49% FDI in domestic airlines in September 2012.
Although Tata is already into a separate joint aviation venture with AirAsia and Telstra Tradeplace for a low-cost airline, there will be no conflict of interest as the two airlines do not compete in the same space. AirAsia has been fully aware of this joint venture and has no objection to the deal.
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Month: Current Affairs - September, 2013