FIPB clears the runway for Tata Airlines
OUR CORPORATE BUREAU
NEW DELHI, Jan 17: The Foreign Investment Promotion Board (FIPB) has cleared Tata Airlines' proposal to induct 40 per cent foreign equity in its proposed Rs 1475-crore airline. Tata Airline will have a seven aircraft fleet and will fly to 12 destinations in the first year of operation.With a Rs 695-crore equity, it will have the largest capital base in the domestic airline industry. The FIPB cleared the airline project in a meeting on Saturday. It has now referred the project to the Cabinet Committee on Foreign Investment (CCFI) for approval. FIPB chairman TR Prasad said: "We have given the go-ahead to the Tata Airline as it is within the parametres of the aviation policy. It has a 40 per cent foreign equity component which is from a non-airline source". With the FIPB nod, Ratan Tata's dream of entering the civil aviation sector has moved a step closer to being realised. The proposed airline now awaits the crucial no-objection certificate (NOC) from the ministry of civil aviation. The NOC will enable
the Tata airline to import aircraft. Under the Tata group's plans, foreign institutional investors (FIIs) will pick-up a 40 per cent stake worth Rs 278 crore in the airline. Tata Industries, along with other Tata companies and domestic investors, propose to pump in Rs 417 crore as equity in the company. The proposed airline will be called the Tata Airline Private Ltd. Its CEO is yet to be decided. Tata Airline plans to fly to 21 destinations in the second year of operations. It intends to acquire 18 aircraft over a five-year period. Of these, two are likely to be 5070-seaters.The rest will be 200 seaters or larger aircraft.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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