Tata Group In Race For Aviation License

We have stated on many occasions in the past that the India aviation space is getting murkier, with mounting losses and an inability to service debt. The scenario was getting so bad that the likes of Kingfisher Airlines could not sustain itself and had to cease its operations. Even Jet Airways had to take support from UAE-based carrier Etihad to stay afloat.

But the scenario seems to be changing. After the Jet-Etihad deal, Malaysia-based low cost aviation company.Air Asia also showed keen interest in entering the India skies. Air Asia, which has successfully followed the low cost model elsewhere, wishes to replicate the same in the Indian markets. It had tied up with Tata Group for the same, and Arun Bhatia's Telestra Tradeplace is the third partner.

The Tata Group had earlier stated that the venture is simply an investment, and hence, it has no plans of playing an active role in this venture. Now, when Air Asia is all set to its launch India operations, the Tata Group is planning its foray into aviation.

As per reports, starting the process of incorporating a new company for its proposed aviation venture with Singapore Airlines, the group has sought to register this entity as 'Tata SIA Airlines'. The reports also suggested that the application for registration of this name has been filed with the Registrar of Companies through submission of Form '1A', which is the first step towards incorporation of a new company.

Going by the proposed name, experts feel that the new company would be a 'Public Limited. Company'. Private Limited companies need to add this suffix to their names during the registration process itself.

How successful the venture becomes in a current scenario of cut-throat competition remains to be seen. We also need to look out for how Air Asia and Tata SIA Airlines work when they come across the same opportunities. As regards the impact on the current players, it would be too early to comment on the expected respective market share. However, a player like Tata Group, with its deep pockets and existing expertise in the sector, is expected to be a game changer in the sector.