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Rediff.com  » Business » Rao govt wanted Tatas to start airline but backed out: Ratan Tata

Rao govt wanted Tatas to start airline but backed out: Ratan Tata

January 30, 2015 09:33 IST

In 2010, Ratan Tata had spoken of how he had to abandon plans to launch an airline because he refused to pay bribes to secure the necessary approvals. 

Image: Ratan Tata receives a flight certificate from pilot Mike Wallace after they flew the F/A-18 Super Hornet aircraft during the 'Aero India 2011' at Yelahanka air force station in Bangalore. Reuters
 
 

The Tata Group's plans to launch an airline in the mid-1990s was scuttled despite the backing of then prime minister P V Narasimha Rao, Ratan Tata, chairman emeritus, said on Wednesday. 

Later, the government had backed out due to opposition from rival airlines, he said at an event to celebrate the launch of Vistara, a Tata Group-Singapore Airlines joint venture, which began operations earlier this month. 

Image: JRD Tata with Ratan Tata. Photograph: Gopal Shetty
 
 

Tata recalled the plan to launch an airline was initiated after former group chairman J R D Tata met the then cabinet secretary and was informed of the government's desire to allow private airlines.

"J R D Tata first came away quite excited, but told me 'we have been out of the airline sector for many years and it has changed; it's become very competitive. It has new technology and it is different from what it was when Air India was first started. So, let's go and get the best partner we can...and give the country a world-class airline'," Tata said.

"That never happened." "J R D (Tata) would have been really proud of Vistara. I am sure wherever he is, he would be looking at us and be very pleased." 

In the mid and late 1990s, the group had made several unsuccessful attempts to launch an airline. This included a partnership with Singapore Airlines.

A joint venture between the two groups was first mooted by then Singapore prime minister Goh Chok Tong. 

In 2010, Ratan Tata had spoken of how he had to abandon plans to launch an airline because he refused to pay bribes to secure the necessary approvals. 

In 1995, the Tatas and Singapore Airlines had devised a plan to set up a new airline with a fleet of 16 aircraft.

The Tatas were willing to concede 60 per cent equity share to Singapore Airlines. 

A team led by S Ramakrishna, formerly with Tata Industries, and Sujit Gupta, the company's Delhi resident director, from the Tatas' side, and senior Singapore Airlines executives such as Karamjit Singh, an old corporate affairs hand, was set up. 

Image: JRD Tata. Photograph, courtesy: Vistara/Facebook
 
 

However the project was abandoned due to opposition, as well as lack of support from the United Front government, which assumed office in 1996. 

When the Atal Behari Vajpayee-led National Democratic Alliance government planned to privatise Air India in late 2001, the Tatas sensed another opportunity and offered to collaborate with Singapore Airlines to take 40 per cent in Air India.

But that plan, too, failed due to opposition from political parties and trade unions.

Source: