Airline JV to create jobs, boost airline sector: Tata-SIA

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.

The two partners have also listed out a number of other economic benefits for the country from their new venture, Tata SIA Airlines Ltd, where Tata Sons would hold 51 per cent stake and Singapore Airlines (SIA) 49 per cent.

"The brand 'SIA' is recognised worldwide and the expansion of the 'SIA' in India will signal the ability of the country to attract leading names from the international circuit to benefit the Indian market and customers.

"High foreign investment inflows would further strengthen the civil aviation sector," the two partners said in an application to the Foreign Investment Promotion Board (FIPB), while seeking approval for $49 billion worth FDI by SIA.

The two groups have also emphasised that investment from SIA and operations of the proposed JV would have the potential for significant foreign exchange earnings in India.

Tatas and SIA, which are together attempting an aviation venture for the third time, also said that the venture would generate significant job opportunities and that the JV would hire Indian residents to establish its operations here.

The job avenues would be for "qualified pilots, technicians, managers and skilled labour in India".

Amid many players facing challenging times in the domestic aviation space, SIA has also affirmed its commitment to long-term presence in the country.

Besides, the two entities have said that the new venture would also enhance business opportunities for various stakeholders including vendors, suppliers and contractors.

Tatas said that the proposed airline venture would tap the synergies with its various group companies, while SIA would bring on board the technical expertise and best business practices with regard to aviation business.

They also said that the JV would benefit from economies of scale offered by vendors to SIA in relation to procurement of aircraft, engineering services, spares and infrastructure. The proposed airline also plans to offer "renting and leasing (except financial leasing) of aircraft".

It would also provide air transport carriers for both passengers and freights as well as "supporting services to air transport, like operation or airport flying facilities, radio beacons, flying control centres and radar stations etc".

Among others, SIA's contribution to the joint venture would include providing access to the Singapore entity's global network besides offering necessary technical expertise and know-how in relation to the civil aviation sector.

Tata Sons, the holding company of most of the operating firms of the salt-to-software conglomerate Tata group, has signed an MoU with SIA for the venture.