Mint had reviewed the 20 September document submitted to FIPB.
The application document also said the joint venture company has great potential to benefit from Tata group's goodwill and network as it seeks to establish its business in India.
"Tata's contribution towards the JV (joint venture) company shall include: providing knowledge of the Indian market (including knowledge of customers and related market support); providing for secondment of personnel to the JV company; working towards creation of synergies between the JV company and other affiliates of Tata on a best efforts basis; and making reasonable efforts for the JV company to benefit from economies of scale offered by vendors to Tata in relation to goods and/or services as may be required by the JV company from time to time," the document said.
The Tata Group is no stranger to aviation. In 2000, Tata Sons and SIA abandoned a joint attempt to buy a 40% stake in Air India Ltd -- an airline which the group founded as Tata Airlines in the 1930s before it was nationalized in 1953. Political resistance and corporate rivalries were blamed for the Tata group abandoning the project.
An earlier attempt by the two companies to start an Indian airline with 40% equity contribution by SIA was also aborted.
In 2010, then-Tata Sons chairman Ratan Tata hinted that he had to abandon plans to launch an airline because he refused to pay bribes to authorities to secure the necessary approvals.
"SIA's entry into India with Tata, whilst being strategic, the step enhances SIA's global network footprint by giving the airline a much needed second hub," said Mark D. Martin, founder and chief executive officer at Martin Consulting LLC.
"The Tata-SIA and Tata-AirAsia joint venture will also have a rain-maker effect on India," Martin said. "Airports now should be aggressively knocking on the airlines' doors to sell its location. In times to come we will see progressive changes to India's landscape and with the FDI (foreign direct investment) policy supporting greenfield investment in airlines, a first in the world, employment in aviation and airlines will improve whilst support industries such as inflight kitchens, ground handling, airport operations support, aircraft spares and product support and other connected support industries such as transportation and hospitality will see positive growth."
Copyright 2013 - Mint, New Delhi
Foreign Investment Promotion Board cleares proposed joint venture for setting up a full-service airline,
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A macro introduction to the Indian aviation and ground support industries.