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New Airline To Start In India  
User currently offlinekingfisherfly From India, joined Mar 2010, 22 posts, RR: 0
Posted (11 months 2 weeks 3 days 13 hours ago) and read 4916 times:

http://www.thehindubusinessline.com/...service-carrier/article5145898.ece

MUMBAI, SEPT 19,
Tata Sons and Singapore Airlines have signed a memorandum of understanding and applied for Foreign Investment Promotion Board (FIPB) approval to establish a new airline in India that will help further stimulate demand for air travel.

Subject to FIPB and other regulatory approvals, the airline will be based in New Delhi and will operate under the full-service model. Tata Sons will own 51 per cent and Singapore Airlines will own 49 per cent.

The initial board would have three members, two nominated by Tata Sons and one nominated by Singapore Airlines. The Chairman will be Prasad Menon, nominated by Tata Sons.

"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," said the Chairman of the proposed joint venture, Menon.



#Seems very much promising.
Tata and Singapore airlines are well known for their standards in their industry.

Congrats and Good Luck to both of them  

[Edited 2013-09-19 04:31:03]

31 replies: All unread, showing first 25:
 
User currently offlinefreqflyer From India, joined Apr 2006, 100 posts, RR: 0
Reply 1, posted (11 months 2 weeks 3 days 12 hours ago) and read 4866 times:

I was wondering when this would happen !

But where does this leave the Air Asia stake? Does Tata still have their 7% stake in Spicejet?


User currently offlinekingfisherfly From India, joined Mar 2010, 22 posts, RR: 0
Reply 2, posted (11 months 2 weeks 3 days 12 hours ago) and read 4810 times:

It is going to be really interesting to see how the market share will be dividing on full service airlines given the fact that Jet airways carried out heavy cuts in their spend on quality service in the last couple of years.

Maybe Jetihad deal will help Jet Airways to improve their finances for better service (?)

[Edited 2013-09-19 04:46:15]

User currently offlinehuaiwei From Singapore, joined Oct 2008, 1114 posts, RR: 2
Reply 3, posted (11 months 2 weeks 3 days 12 hours ago) and read 4709 times:

So it is a dream finally come true for SQ, who has been trying for decades to do exactly this?


It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently offlinejayeshrulz From India, joined Apr 2007, 1027 posts, RR: 2
Reply 4, posted (11 months 2 weeks 3 days 11 hours ago) and read 4573 times:

Quoting huaiwei (Reply 3):
So it is a dream finally come true for SQ, who has been trying for decades to do exactly this?

Yes you are absolutely correct. In the past SQ has twice tried to lobby it to invest/partnership with another airline and were hoping things would workout with AI in Star Alliance. That clearly dint happen.

So Tatas are back with a bang, with not only Air Asia India, but also SQ!
I wonder what is Tony Fernandez thinking.



Keep flying, because the sky is no limit!
User currently offlinefreqflyer From India, joined Apr 2006, 100 posts, RR: 0
Reply 5, posted (11 months 2 weeks 3 days 11 hours ago) and read 4535 times:

Quoting jayeshrulz (Reply 4):
I wonder what is Tony Fernandez thinking.

Tata would definitely have discussed this with TF beforehand.

Air Asia India does not wish to fly to DEL and BOM. The new airline will be based out of DEL and is full service. It may not compete all that much with Air Asia.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17448 posts, RR: 46
Reply 6, posted (11 months 2 weeks 3 days 11 hours ago) and read 4445 times:

I foresee this having a 90% chance of turning out like KF.

Quoting kingfisherfly (Reply 2):
It is going to be really interesting to see how the market share will be dividing on full service airlines given the fact that Jet airways carried out heavy cuts in their spend on quality service in the last couple of years.

I'm not sure there's room for another full service carrier, or LCC for that matter, since only on LCC is making money among all of India's airlines.



E pur si muove -Galileo
User currently offlinegolfradio From Canada, joined Jun 2009, 760 posts, RR: 2
Reply 7, posted (11 months 2 weeks 3 days 11 hours ago) and read 4378 times:

Quoting MaverickM11 (Reply 6):
I'm not sure there's room for another full service carrier, or LCC for that matter, since only on LCC is making money among all of India's airlines.

I agree. They missed their chance 12 years ago. They would have been a well entrenched player by now. It's going to be a race to the bottom with another price war.


User currently offlineVimanav From India, joined Jul 2003, 1516 posts, RR: 14
Reply 8, posted (11 months 2 weeks 3 days 6 hours ago) and read 4030 times:

Quoting MaverickM11 (Reply 6):
I foresee this having a 90% chance of turning out like KF.

Au contraire, they may just be what the industry needs. They - for sure - will not be managed by one single megalomaniac like Kingfisher was and in all likely-hood the 20 aircraft / 5 year rule will be gone by the time they get operational. Tata's are renowned for their professionalism especially when it comes to impartially choosing the right person for the right job and SQ are no slouches either.

So let's wish them the best through what would be a turbulent start to say the least.

brgds//Vimanav



Sarfaroshi kii tamannaa ab hamaare dil mein hai, Dekhnaa hai zor kitnaa baazu-e-qaatil mein hai
User currently offlinekingfisherfly From India, joined Mar 2010, 22 posts, RR: 0
Reply 9, posted (11 months 2 weeks 3 days 4 hours ago) and read 3892 times:

Quoting Vimanav (Reply 8):
Tata's are renowned for their professionalism especially when it comes to impartially choosing the right person for the right job and SQ are no slouches either.

^^ Well said Vimanav !!

There is always scope for a full service airline India given the fact of "double digit growth year over year in the sub-continent". It is TATA this time who is stepping in again after decades. Also not to mention the amatuer-ish KF management who nowhere can survive in Aviation Industry.

My question is, given the approval "Where will they be sourcing aircrafts for a quick start ?" Any silk air flights/orders to turn up for initial start ? Any idea  


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17448 posts, RR: 46
Reply 10, posted (11 months 2 weeks 3 days 4 hours ago) and read 3860 times:

Quoting Vimanav (Reply 8):
They - for sure - will not be managed by one single megalomaniac like Kingfisher

I would hope so, but my point is more that India is having trouble supporting its current slew of carriers, never mind a new one

Quoting kingfisherfly (Reply 9):
There is always scope for a full service airline India given the fact of "double digit growth year over year in the sub-continent".

But that's been the case for years, and now that India is facing its biggest economic crisis in decades, where is the opportunity?



E pur si muove -Galileo
User currently offline777way From Pakistan, joined Dec 2005, 5716 posts, RR: 4
Reply 11, posted (11 months 2 weeks 3 days 4 hours ago) and read 3847 times:

isn't 9W a full service world class airline, and despite the mess so was Kingfisher.

User currently offlineVTORD From United States of America, joined Dec 2012, 117 posts, RR: 0
Reply 12, posted (11 months 2 weeks 3 days 1 hour ago) and read 3689 times:

Quoting Vimanav (Reply 8):

100%. As pointed out in Reply 8 this airline is likely backed by a guy who has a genuine passion for aviation, was picked by none other than JRD himself to run Tata Sons up until last year. Under JRD AI was something to be reckoned with. Under Ratan Tata, the Tatas grew phenomenally. I find it hard how RT will not be involved with this.

Plus India is headed for an election in less than 8 months with anti-incumbency at an all time high. If that happens, the man in charge of the country is the same guy who almost overnight gave the Tatas a place to build the Nano factory when they ran in to all sorts of problems in West Bengal. Industry as a whole will have his ears. Heck he might even divest AI who knows??



Get your facts first. Then you may distort them as you like.
User currently offline747megatop From United States of America, joined May 2007, 716 posts, RR: 0
Reply 13, posted (11 months 2 weeks 3 days 1 hour ago) and read 3655 times:

Quoting MaverickM11 (Reply 10):

I would hope so, but my point is more that India is having trouble supporting its current slew of carriers, never mind a new one

   Especially given the archaic rules and policies of the Indian Govt. For example the 5 year rule of not allowing new airlines to fly internationally, combined with the high ATF taxes. To give a decent chance for this new airline to survive and other Indian airlines to thrive they need to lower the high ATF taxes; get rid of this ridiculous 5 year rule among the other improvements that need to be done. And in fact, if the new SIA-Tata combine airline establishes a fortress hub in DEL or BLR they should be given concessions (with metal neutral flights from the hub to Europe, North America and Australia); it would give serious competition to the MEB3 which are making a killing now. That's the only way this new airline and some of the Indian carriers will survive in the long run.


User currently offlinetharanga From United States of America, joined Apr 2009, 1865 posts, RR: 1
Reply 14, posted (11 months 2 weeks 3 days ago) and read 3601 times:

Quoting kingfisherfly (Reply 9):
There is always scope for a full service airline India given the fact of "double digit growth year over year in the sub-continent".

The market can grow, but if new entrants keep pouring in, and airlines don't show capacity restraint, then nobody makes money and the weakest ones will keep getting weeded out. well, not AI; that's immune to weeding.


User currently offlineDIJKKIJK From France, joined Jul 2003, 1791 posts, RR: 4
Reply 15, posted (11 months 2 weeks 2 days 13 hours ago) and read 3045 times:

Quoting kingfisherfly (Reply 9):
There is always scope for a full service airline India given the fact of "double digit growth year over year in the sub-continent". It is TATA this time who is stepping in again after decades. Also not to mention the amatuer-ish KF management who nowhere can survive in Aviation Industry.

It has been a while since India grew in double digits. It has slowed down to about 4% now.
and all the Tata involvement notwithstanding, this new airline is going to find the going pretty tough. Apparently, Air India too has got its act together with its hub in DEL and Jet Airways is on the upswing with the investment from EY. Add to these all the capacity by gulf carriers on the international routes and the over-saturation of the domestic market by carriers like Indigo, it is difficult to see what segment of the market this Tata-SQ venture is looking to tap into.


That said, why is it going to be DEL based? Why not BOM, where a sparkling, brand new terminal is coming up, which promises to be one of the best in that part of the world once complete?



[Edited 2013-09-20 03:58:53]


Never argue with idiots. They will bring you down to their level, and beat you with experience.
User currently offlinesankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Reply 16, posted (11 months 2 weeks 2 days 12 hours ago) and read 2799 times:

Quoting DIJKKIJK (Reply 15):
That said, why is it going to be DEL based? Why not BOM, where a sparkling, brand new terminal is coming up, which promises to be one of the best in that part of the world once complete?

My guess is DEL is better located for Asia-Europe connects and also has much more room for growth (especially runway and parking capacity) than BOM.

[Edited 2013-09-20 05:18:54]

User currently offline747megatop From United States of America, joined May 2007, 716 posts, RR: 0
Reply 17, posted (11 months 2 weeks 2 days 8 hours ago) and read 2648 times:

Quoting DIJKKIJK (Reply 15):
That said, why is it going to be DEL based?

Per the article the headquarters will be in Delhi. They haven't said where the operational hub would be. But, since the usual suspects for an operational hub are BOM & DEL; it has to be DEL since BOM can be ruled out due to runway capacity unless they get a new airport.


User currently offlineairdfw From United States of America, joined Aug 2012, 192 posts, RR: 0
Reply 18, posted (11 months 2 weeks 2 days 7 hours ago) and read 2583 times:

I think they need to make a deal with Govt to take AI out of its hand and return it to original owners. With AI + SQ it would be a formidable company. May be it has to wait for the elections but I think it is probably worth it for TATAs to go this route?

User currently offlinesankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Reply 19, posted (11 months 2 weeks 2 days 7 hours ago) and read 2573 times:

Quoting airdfw (Reply 18):
With AI + SQ it would be a formidable company. May be it has to wait for the elections but I think it is probably worth it for TATAs to go this route?

Too many liabilities, better to start fresh. Only thing of value are its rights and slots. But they can be re-assigned.


User currently offlineVimanav From India, joined Jul 2003, 1516 posts, RR: 14
Reply 20, posted (11 months 2 weeks 2 days 6 hours ago) and read 2490 times:

In my view this is a fantastic vindication of the latent potential of air traffic in India. It shows that a highly respected airline like SQ and a highly regarded corporate like the Tata's - clearly recognize that beyond the duds who run our Civil Aviation, beyond the notoriously selfish and intrigue laden back-room shenanigans of Naresh Goyal and co. to secure their own interests (and 9W's), they still feel that India's true aviation potential cannot be stifled for long and are willing to bet on India in the long term.

Agreed the Indian economy is going through a really bad patch. This is however not too different from what other developing economies are facing at this point of time. There is definitely a case to say that till end 2014 Indian Aviation will continue to be in the doldrums. Till the hustings in mid 2014 as we have a lame-duck Government who will not be allowed to do anything by the Opposition and thereafter till end of 2014 because whosoever comes into power will take about 6 months to understand and take corrective measures necessary to bring the growth back where it belongs.

When the economy is predicted to grow at about 7 - 7.5% p.a. in 2015-16 it is natural for pax demand to be growing in the range of about 12-15%. The Tata-SQ project should be well poised to take advantage of this crest in the business wave.

To the naysayers and doubters about India's ability to bounce back, I say wait and watch.

What is however still rather inexplicable is how Tony Fernandes is going to take this. Honestly AirAsia and all its South East Asian bluster apart - I continue to have very honest doubts about their model in India and the way they are going about it.

brgds//Vimanav



Sarfaroshi kii tamannaa ab hamaare dil mein hai, Dekhnaa hai zor kitnaa baazu-e-qaatil mein hai
User currently offlinesankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Reply 21, posted (11 months 2 weeks 2 days 6 hours ago) and read 2452 times:

Quoting Vimanav (Reply 20):
What is however still rather inexplicable is how Tony Fernandes is going to take this. Honestly AirAsia and all its South East Asian bluster apart - I continue to have very honest doubts about their model in India and the way they are going about it.

Air Asia India's biggest "hard to match" advantage is going to come from its fleet and related services (engines. maintenance, etc), as they will benefit from the deep discounts that mega-orders of the type Air Asia Group has placed, get.

It will also benefit from the Group's experience in running a lean and tight operation with seamless systems and processes to minimize costs and maximize ancillary revenues.

But Air Asia is not infallible, as we have seen in Japan and Indonesia and other places. Their management choices for the India arm have indeed been somewhat unusual.

[Edited 2013-09-20 11:29:57]

User currently offlinegolfradio From Canada, joined Jun 2009, 760 posts, RR: 2
Reply 22, posted (11 months 2 weeks 2 days 5 hours ago) and read 2401 times:

In a country like India where the railway is a very viable alternative, air travel is highly price elastic. And given that most sectors are less than 2 hours long, it is no surprise that the only ones making any money are the LCCs. Look at the statistics for how much ancillary revenue Indian airlines bring in compared to European and North American airlines. That should tell you how tight Indian travelers are. The falling rupee coupled with high USD denominated fuel prices, prices are bound to go north. And none of those factors are going to change in the next 3-4 years.

I just don't see how a full service airline is going to make money and have a decent ROI, no matter who runs it.


User currently offlinesankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Reply 23, posted (11 months 2 weeks 2 days 5 hours ago) and read 2397 times:

AirAsia India partner opposes Tata-Singapore Airlines joint venture.

http://economictimes.indiatimes.com/...t-venture/articleshow/22822279.cms

My guess is Air Asia itself -- Tony and co -- are keeping mum until they figure out what the heck is going on!

Edited to add: Less the convincing tap-dance by Air Asia in this report: http://www.business-standard.com/art...ie-up-air-asia-113092001180_1.html

IMHO, even if there is no overlap at all in India (which is difficult), the fact that Air Asia and SQ's Tiger and Scoot compete in SE Asia and elsewhere will make this somewhat uncomfortable for these two to be partnering with the same entity in India.

[Edited 2013-09-20 12:05:48]

User currently offlineDTW2HYD From United States of America, joined Jan 2013, 1898 posts, RR: 0
Reply 24, posted (11 months 2 weeks 2 days 5 hours ago) and read 2369 times:

Can this airline be setup as *A ready from get go. IT systems and everything else a member airline needs. Just a thought.

User currently offlinegolfradio From Canada, joined Jun 2009, 760 posts, RR: 2
Reply 25, posted (11 months 2 weeks 2 days 5 hours ago) and read 2434 times:

Quoting DTW2HYD (Reply 24):

You can bet it's going to be so.


User currently offlineart From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 26, posted (11 months 2 weeks 2 days 2 hours ago) and read 2334 times:

Won't the Indiam govt try to protect AI if a new carrier starts taking its customers (by making things difficult for the new competitor)?

User currently offlineDTW2HYD From United States of America, joined Jan 2013, 1898 posts, RR: 0
Reply 27, posted (11 months 2 weeks 2 days ago) and read 2292 times:

Quoting art (Reply 26):
Won't the Indian govt try to protect AI if a new carrier starts taking its customers (by making things difficult for the new competitor)?

Not really. Its purpose is not to bring down private sector airlines but to act as airline of last resort. Also private airlines have no social obligations, need not to accommodate politicians (don't know how many thousands through out the country). All the dirty work is done by to AI in turn its loses are covered by tax payer.

Its different from US model, but works better for Indian conditions. There is no need for Government to arm twist to run a regional route even with subsidy. People complain about politicians meddling with AI, imagine Indian politicians meddling with all airlines!!!

There are 200+ public sector enterprises playing similar role in each sector. Only difference unlike AI most of them are profitable.


User currently offlineVTORD From United States of America, joined Dec 2012, 117 posts, RR: 0
Reply 28, posted (11 months 2 weeks 1 day 23 hours ago) and read 2232 times:

Quoting art (Reply 26):
Won't the Indian govt try to protect AI if a new carrier starts taking its customers (by making things difficult for the new competitor)?

This is a big misnomer about the GoI. So far all history suggests that GoI has for the most part used AI for their own selfish motives. For e.g., AI has dedicated a 744 for the Prime Minister and Presidential travel and currently have 3 77Ws on order "For Government Use" Why can't the GoI spend a dedicated plane for the PM and President? Can't be that expensive. Or the fact that the massive stimulus just given to AI is contingent on return to profit by 2018 but what does the GoI do....grants a massive seat increase to a rival on one of AI's most profitable international routes.

As pointed out by "Vimanav" in Reply 20, one of the charges laid at Naresh Goyal's door step has been that he has over the years stymied aviation reform to suit his purpose including in the late 90s - early 2000s when Arun Shourie as the disinvestment minister had recommended divesting AI. This was one of the most prolific divestiture runs India saw - Maruti, VSNL and Indian Hotels among others. The last but one paragraph from the news article below has a very telling statement by SIA at the time

http://www.livemint.com/Opinion/XeoD...long-wait-for-Indias-airspace.html



Get your facts first. Then you may distort them as you like.
User currently offlineairdfw From United States of America, joined Aug 2012, 192 posts, RR: 0
Reply 29, posted (11 months 2 weeks 1 day 6 hours ago) and read 1908 times:

I still think it is bad idea. Aviation has the tendency to make the billionaires to millionaires. That saying is especially true in India.

User currently offlineHAWK21M From India, joined Jan 2001, 31679 posts, RR: 56
Reply 30, posted (11 months 2 weeks 1 day 5 hours ago) and read 1846 times:

Quoting freqflyer (Reply 5):
Tata would definitely have discussed this with TF beforehand.

From the reports doing the round.....Looks like TATAs might sell their 30% stake out of Air Asia India & focus on the TATA-SIN plan.

Quoting VTORD (Reply 12):
If that happens, the man in charge of the country is the same guy who almost overnight gave the Tatas a place to build the Nano factory when they ran in to all sorts of problems in West Bengal

Good point.

Quoting sankaps (Reply 16):

My guess is DEL is better located for Asia-Europe connects and also has much more room for growth (especially runway and parking capacity) than BOM.

Bom has no Horizontal space left  



Think of the brighter side!
User currently offlineDTW2HYD From United States of America, joined Jan 2013, 1898 posts, RR: 0
Reply 31, posted (11 months 2 weeks 2 hours ago) and read 1537 times:

This has quid pro quo written all over. Probably this is the only way to clear 9W/EY and UAE bilateral deals from legal troubles. We have to see if Supreme Court case gets withdrawn. Probably GoI don't want SC/CBI digging into details.

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