SINGAPORE AIRLINES (SIA) and Tata Industries are confident that their proposed joint venture to set up an Indian domestic carrier will go ahead, despite local political and airline opposition.

The planned SIA-Tata partnership has been attacked by Pramod Mahajan, general secretary of India's main opposition party, the Bharatiya Janata (BJP), for enabling a foreign company to hold an equity stake in a domestic airline.

He has threatened to cancel the deal if the BJP wins power at the next general election, due to held before the middle of 1996. SIA should "...think twice before investing any money in the project", warns Mahajan.

India's growing number of domestic airlines are lobbying against the joint venture, fearing increased competition. The SIA-Tata carrier plans to introduce a fleet of up to 16 aircraft, increasing domestic capacity by 11-12% over the next five years.

The country already has five private carriers, collectively operating more than 25 Boeing 737s, as well as Indian Airlines. Three of the carriers, Damania Airways, East West Airlines and Jet Airways, are hoping to acquire a further 12 737-300s.

Tata officials argue that there is no threat of over-capacity or fare-cutting, with India's domestic airline industry enjoying high load-factors and double-digit growth on many trunk routes.

The proposed airline, with a 60:40 equity split in favour of Tata, has not yet been approved by the Indian Government. SIA assistant director for corporate affairs, Karmjit Singh, confirms that an application was submitted in early February. Singh has been unofficially named chief executive officer of the start-up airline.

Source: Flight International