Sept. 19 (Bloomberg) -- Singapore Airlines Ltd. is forming a joint venture with Tata Sons Ltd. to start an airline in India as the country’s economic growth enables more people to fly.
Tata, the Indian owner of Jaguar Land Rover and businesses ranging from hotels to software, will hold 51 percent of the venture and Singapore Air the remainder, the airline said in a statement today. The two companies entered into an initial agreement for a $100 million investment and are seeking approval to set up the full-service carrier to be based in New Delhi.
“The Indian aviation industry is projected to experience future high growth rates,” Singapore Airlines said in the statement. “The recent Indian government decision to allow foreign airlines to invest up to 49 percent in Indian carriers provides an opportunity for SIA to participate directly in one of the fastest growing and largest aviation markets globally.”
Prime Minister Manmohan Singh’s government last year allowed overseas carriers to buy holdings of as much as 49 percent in local companies. Following that, AirAsia Bhd., Southeast Asia’s biggest budget operator, formed a venture with Mumbai-based Tata Group to set up a local low-fare airline while Etihad Airways PJSC agreed to buy a stake in Jet Airways (India) Ltd.
--Editors: Anand Krishnamoorthy, Vipin V. Nair