Competition Commission of India (CCI) has issued a show cause notice to the parties with respect to the proposed merger of Tata Group airlines Vistara and Air India, according to a source. The fair trade watchdog issues notice asking why an investigation should not be initiated only after forming a prima-facie opinion that the deal could adversely impact competition in the marketplace. Vistara and Air India are the two full-service carriers that are part of the Tata Group, and Singapore Airlines holds a 49 per cent stake in Vistara.
JV will set up a full-service carrier based out of New Delhi.
In their new venture, Tata SIA Airlines Ltd, Tata Sons would hold 51 per cent stake and Singapore Airlines 49 per cent.
With the FIPB giving approval to the Tata-Singapore Airlines joint venture to start a full-service carrier, Tata Group Chairman Emeritus Ratan Tata on Friday met Commerce and Industry Minister Anand Sharma.
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As per the FIPB agenda, the proposal will be taken up on October 18.
However, this was subject to conditions like substantial ownership and effective control of the airline being vested in Indian nationals.
FIA has filed two separate petitions challenging the approvals granted to Tata-Airasia and Tata-SIA Airlines deals respectively.
Tatas and Singapore Airlines have assured the government that control of their proposed airline venture would always remain in Indian hands, while seeking approval to offer passenger services on both domestic and international routes.
Vistara launched first flight from Hyderabad to New Delhi on Sunday.
The exact figure not known yet but advertisements for recruiting employees would hit print this week.
A bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw posted the matter for hearing on Friday.
Earlier, the JV company got a go-ahead from the Foreign Investment Promotion Board in October 2013 and was awaiting AOP for launching a full-service carrier.
The Delhi High Court on Wednesday allowed a plea to implead DGCA as a party to a PIL seeking quashing of approvals being granted by the Centre to operationalise the $30 million deal between Tata Sons and Malaysia-based AirAsia.
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The proposal of Tatas and Singapore Airlines for a new joint venture, entailing foreign investment of $49 million, is likely to come up before the Foreign Investment Promotion Board for approval on October 18.
They say better late than never. For the Tatas, the original owners of Air India, bringing back the airline to its fold is worth the wait even if the attempt to privatise the bleeding national carrier by successive governments has taken over two decades. While many airlines have come and gone from the Indian skies since the time when the first move was made to privatise Air India to date, the salt-to-software conglomerate has never let the love affair with aviation, more so with Air India that its former chairman Jehangir Ratanji Dadabhoy Tata (JRD) had, to go off the radar. It is said that Tata group executives used to complain in private that JRD -- the pioneer of the Indian aviation industry -- spent more time worrying about Air India than the Tata group when he was heading both the entities.
While four of the directors would be nominated by Tata Sons, the other two would be representatives of Singapore Airlines.
"The strategic divestment transaction of Air India successfully concluded today with transfer of 100 per cent shares of Air India to M/s Talace Pvt Ltd along with management control," DIPAM secretary Tuhin Kanta Pandey said in a tweet. A new board, led by the strategic partner, takes charge of Air India, he added.
As per information available with the Corporate Affairs Ministry, the new company was incorporated on November 5 with a total paid up capital of Rs 500,000 and has been registered in New Delhi.
Making a strong case for approval of their proposed airline JV, Tatas and Singapore Airlines have said that the venture would create significant job opportunities in India and would boost the country's image as an international investment destination.
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