Nod for Tata-SIA venture sends out positive signals: Analysts

Expressed confidence that the Tata-SIA has the potential to be among the top three airlines in India by 2015

Aviation industry analysts today welcomed the government's approval to Singapore Airlines' proposal to start aviation venture with Tata Sons.

"Welcome news. This sends our very positive signals to the global investor community," global consultancy KPMG partner and head for aerospace and defence Amber Dubey said in a statement.

Earlier in the day, Economic Affairs Secretary Arvind Mayaram said the Foreign Investment Promotion Board (FIPB) has cleared the Tata-SIA proposal.

When contacted, a Tata Group spokesperson said the company is still awaiting a formal communication from the government in this regard (FIPB approval).

Expressing confidence that the Tata-SIA has the potential to be among the top three airlines in India by 2015, Dubey said the government now must do away with the rules that bar domestic carriers from flying international unless they complete five years of operations and have 20-aircraft fleet.

"What is needed is the immediate abolition of the discriminatory 5/20 rule that will allow all Indian carriers to operate on international routes," he said in the statement.

Right now, the long-haul international traffic from India is completely dominated by foreign carriers, he added.

PwC India executive director Dhiraj Mathur while welcoming the Tata Group's re-entry in the  domestic aviation space said the joint venture will give a fillip to the sector.

"Welcome return to the aviation sector by Tata group. In the long run, I expect the partnership to add depth and breadth to the sector in India," Mathur said.