Trouble seems to be brewing within the stakeholders in AirAsia’s venture to launch a low-cost carrier in India, with one of the stakeholders, Arun Bhatia of Telestra Tradeplace pvt. ltd., being reportedly miffed with the announcement by the Tatas on Thursday that they propose to launch their very own full-service carrier in India with Singapore Airlines.
In the AirAsia-led venture, AirAsia owns 49 per cent stake, Tata Sons owns 30 per cent stake while Mr Bhatia owns 21 per cent stake. On the other hand, Tata Sons proposes to own 51 per cent of its own new venture to launch a full-service carrier, with partner Singapore Airlines to own the remaining 49 per cent.
Mr Bhatia was quoted by a website on Friday, saying, “Ethically speaking, they (the Tatas) should have informed us, discussed it with us.” Mr Bhatia could not be reached by this newspaper for his comments despite repeated attempts.
Speculation was also rife that Mr Bhatia could also offer to bid for acquisition of the stake of Tata Sons in the AirAsia venture in case the Tatas choose to pull out. However, a Tata Sons spokesperson had indicated on Thursday that the Tatas continue to be very much part of the AirAsia venture, with active participation in the management.
A spokesperson for Tata Sons told this newspaper on Friday that he had no comments to offer on Mr Bhatia’s reported comments. The spokesperson had said on Thursday that the Tata Sons had informed AirAsia about the plan to launch a separate carrier with Singapore Airlines “from the beginning”, thereby indicating that AirAsia had no problem with the decision. AirAsia’s own reaction, however, could not be ascertained and it is unclear whether it has any reservations on the matter.
The controversy has raised questions on the feasibility of one company holding stake in two carriers proposed to be launched in the country soon, given the intense competition that exists between airlines. This is even though the Tata-SIA venture is billed as a full-service carrier while the AirAsia venture will be a low cost carrier offering competitive fares.
However, government sources have already made it clear that there is nothing in Indian aviation rules that disallows one company from holding stake in two airlines.
As reported by this newspaper earlier, all decks have already been cleared for grant of the NoC by the civil aviation ministry for launch of the AirAsia venture.