Aviation ministry attempts to thwart AirAsia JV – as reported here in March

Victoria
By Victoria April 4, 2013 14:25

Aviation ministry attempts to thwart AirAsia JV – as reported here in March

Confirming our suspicions, the minutes of foreign investment proposal-clearing committee have revealed that the civil aviation ministry did try to prevent the creation of an AirAsia JV in India and would have preferred Indian promoters — Tata Sons and Arun Bhatia — to have first set up an airline company, obtained a flying permit and then sold off 49% to the foreign partner. First reported in the Economic Times, the minutes state that although the creation of the airline is “supported in principle” that “the applicant should first set up the company, obtain licence from ministry of civil aviation and then divest to a foreign collaborator in order to follow the policy intent”.

The AirAsia JV may still face a number of bureaucratic hurdles chiefly impediments to the airline’s permissions to fly to certain airports in India. The ET has further reported that “leading Indian airlines have indicated their opposition to AirAsia’s aircraft purchase programme, saying they could lobby with the ministry to scuttle the purchases if they are large in number”. This demonstrates the expected difficulty in operating in the Indian aviation industry for foreign-led airlines.

Victoria
By Victoria April 4, 2013 14:25
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