Singapore Airlines (SIA) has acknowledged that it has a provisional agreement with the TATA Group to provide technical support for its planned start-up carrier, despite an Indian Government ban on allowing any equity investment by foreign airlines.

The company stresses that while SIA will provide "assistance and advice," the planned new carrier, Tata Airlines, will remain 100% Indian owned in line with the Government's recently formulated civil-aviation policy. SIA had originally intended taking up to a 40% share in the start-up.

SIA and TATA have not released any information of the contents of the support agreement for fear of again upsetting the politically delicate Indian approval process. TATA has not had any direct experience of running an airline since Air India, which it founded, was nationalised in 1953 and will therefore rely heavily on SIA for help.

Under the original agreement signed in 1994, SIA was tasked with leading the evaluation of competing aircraft types and it will probably continue to play a role in this area. TATA's revised plans call for the New Delhi-based airline to be operating an initial seven 140-seat aircraft within a year of start-up.

Seconded SIA staff are also certain to play a part in the airline's management, operations and maintenance.

TATA's re-submitted application reportedly has again been approved by India's Foreign Investment Promotion Board. Tata Airlines, however, has still to be granted a critical "no-objection certificate" from the country's civil-aviation ministry, and officials suggest a final go-ahead remains some way off.

Source: Flight International