Singapore Airlines is teaming up with Indian conglomerate Tata Sons to start a new full-service airline in India.
The two companies will spend $100 million on the Delhi-based airline with Tata owns 51 per cent of the business and Singapore 49 per cent.
It will be Tata’s second move into the aviation industry after it agreed to take a minority stake in an Indian no-frills carrier being set up Malaysia’s Air Asia, which is based in Chennai and is due to start by the end of 2013.
Singapore Airlines’ investment has been made possible by the relaxing of rules governing foreign ownership of Indian airlines. Abu Dhabi’s Etihad Airways is purchasing a 24 per cent stake in Indian carrier Jet Airways.
Goh Choon Phong, Singapore Airlines’ CEO, said: “We have always been a strong believer in the growth potential of India’s aviation sector and are excited about the opportunity to partner Tata Sons in contributing to the future expansion of the market.
“Tata Sons is one of the most established and respected names in India. With the recent liberalisation, the time is right to jointly bring consumers a fresh new option for full-service air travel.”
The new airline will be chaired by Prasad Menon, who has been nominated by Tata. Details about the carrier’s branding, management and products will be announced “in due course”.
Menon 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.”