Air Asia and Tata Group which have proposed to set up a
domestic airline along with Arun Bhatia of Telestra Tradeplace, have sought
approval for renting and leasing of aircraft, besides carrying of air freight.
According to
sources, in its application to the FIPB, the partners have also sought
permission for engaging in ancillary activities. “Other activities for which
they have sought permission include air transport carriers (of freight), cargo
handling, renting and leasing of aircraft,” a source said.
The application
for renting and leasing of aircraft, however, does not include financial
leasing.The Malaysian budget carrier had sought the government nod to launch a
new airline through a joint venture with the Tata Group and Bhatia.
Air Asia CEO Tony
Fernandes has said that the new airline may take to the sky by this year-end
with 3-4 Airbus A-320s, and his company will initially invest around $50
million.
An application has
already been moved by Air Asia’s investment arm, Air Asia Investment Ltd (AAIL)
before the Foreign Investment Promotion Board (FIPB) to seek approval for
acquiring 49 per cent equity in the company.
Tata Sons is likely
to pick up 30 per cent and one of Bhatia’s companies, Hindustan Aerosystems, 21
per cent.
After the FIPB
approval, the JV will make an application to the aviation regulator DGCA for
the Air Operators Permit to carry out flying operations.
Fernandes has said
the new airline will be based in Chennai and in the initial phase concentrate
on destinations in South India where Air Asia already operates. It will focus
on providing connectivity to Tier-II and III cities.
The proposed
airline’s Board will have six directors. Air Asia will have two board members -
Fernandes and Kamarudin Bin Meranun apart from Fernandes. Tata Sons will also
have two members - R Venkataramanan and Bharat Vasani, while Telestra
Tradeplace will be represented by Arun Bhatia.
The sixth board
member will be an Indian national, who will be appointed as non-executive
Chairman.
FIPB is likely to
take up Air Asia’s application for the joint venture on March 6.
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