Cautious Reaction From Rival Airlines

Indian airlines (IA) and other private airlines responded cautiously to the news of Tatas decision to withdraw its proposal to set up a domestic airline.

Jet Airways sources refused to comment, but said "we welcome competition. Had the Tatas come in they would have posed no threat to us." IA sources said "competition has not been a problem for us. We have met it in the past fairly and squarely. We would have met it again."

Sources however pointed out that this was a reflection of the Tata's own failure. "The Tata's clearly could conceive their project properly since they could not get clearance through four successive governments", said a source.

Further, it was argued that the timing of the withdrawal raised doubts about whether the project actually met the government guidelines. "As soon as the government decided to form an expert committee to go into the details of the venture and the issues raised by the trade unions and the members of Parliament, the Tata's have withdrawn. This could also mean that they were not confident that their proposal would meet all the requirements", a source argued.IA sources said that the unions had opposed the project on grounds of ideology but that the management was not opposing this proposal.

Sources also argued that the Tata's withdrawal could be an indication that they were not serious about the project. "If Tatas wanted to get it through, nobody could have stopped them. It is possible that they have never been serious except to the extent of keeping the controversy alive to remain in limelight. After all, all their flagships are going down the drain".

It was argued that the Tata's very cagey about revealing names of investors and had not given enough details of the technical services agreement proposed to be entered into.