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Tata-SIA to aqcuire 20 Airbus A-320 on lease

Last Updated: Thursday, January 9, 2014 - 21:37

New Delhi: The full service airline to be launched by Tatas and Singapore Airlines has decided to acquire 20 Airbus A-320s on lease, informed sources said on Thursday.

The start-up airline plans to launch its flights by July, subject to regulatory approvals, and the planes are likely to start getting inducted weeks before that, industry sources said.

When contacted, a Tata Group spokesperson told PTI: "we have decided to lease 20 Airbus A-320s and these aircraft will be leased and not purchased."

Industry sources said the Tata-SIA decision to lease A-320 aircraft is understood to have been taken given the competition prevalent in the Indian aviation industry, where several airlines ranging from Air India to IndiGo operate these aircraft.

There is also an inventory of A-320 in the market, apart from trained pilots, they said.

According to the list price of this aircraft, purchase of 20 such planes would cost over USD 1.8 billion. However, the Tata-SIA would be leasing these aircraft and purchasing them.

In this joint venture which received FIPB approval in October last year, Tata Sons would hold 51 percent stake and Singapore Airlines (SIA) 49 percent. It would have an initial combined investment of USD 100 million from the two stakeholders.

While seeking approval of their proposal to offer full- service passenger airways on both domestic and international routes, Tatas and SIA have assured the government that control of their proposed venture would always remain in Indian hands.

The Tata-SIA airline is the third foreign direct investment in the Indian sector, after Jet-Etihad deal and another start-up carrier AirAsia India, since the government declared last year that international airlines could acquire as much as 49 percent equity in Indian carriers.

First Published: Thursday, January 9, 2014 - 21:37
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