Singapore Airlines' plans to invest US$230 million in a 40 per cent share of a new Indian domestic may be stuck in the mire of Delhi politics, but the airline maintains they are far from buried.
The new carrier, a joint venture with India's biggest conglomerate, Tata Industries, was announced 13 months ago and proposed to launch in the final quarter of 1995, growing to 19 aircraft serving 28 destinations within five years and aiming for an 11 per cent market share.
Early startup of the project floundered amidst a chorus of objections from private domestic operators, yet to find their feet in India's deregulated skies and, not surprisingly, afraid of the clout from an SIA-backed new entrant.
A recent public statement by aviation minister Ghulam Nabi Azad that the joint venture proposal had been rejected proved to be an exercise in kite-flying. The Indian government has since confirmed that the Foreign Investment Review Board has yet to make a decision. With the application at the centre of heated political debate, the ruling is expected to be delayed for some time.
For the moment SIA is maintaining a low profile and keeping out of the debate until the dust settles. 'We are being very patient but we remain confident the joint venture will ultimately be given approval,' says one senior executive.
Privately, both partners continue to deride claims that the venture is not in the national interest and would worsen over-capacity problems. They point to a recent Indian Planning Commission report projecting annual traffic growth of 12 per cent and a requirement for 60 extra aircraft of B737 size over the next six years.
Source: Airline Business
