Delhi HC notice to centre on AirAsia approval

The Delhi High Court Friday issued notice to the central government asking it to respond to a plea seeking quashing of the approval granted to Malaysia-based AirAsia to start flight operations in India.

The plea was filed by the Federation of Indian Airlines (FIA).

Justice Manmohan also sought response from the Foreign Investment Promotion Board (FIPB).

The government March 26 last year had approved AirAsia's proposal to set up a new airline in India in partnership with the Tata Group and the Arun Bhatia-promoted Telestra Tradeplace to create a low-cost airline in India.

On Feb 21, the director general of civil aviation (DGCA) granted permit to AirAsia to start its air operations.

The FIA approached the court opposing the permission granted to AirAsia to start flight operations in India, and asked the court to restrain the company from commencing business.

Justice Manmohan clubbed the plea of the FIA with a plea of Bharatiya Janata Party leader Subramanian Swamy, who had also moved court seeking suspension of the operationalisation of the deal between Tata Sons and AirAsia.

The other bench, however, had refused to suspend the operationalisation of the $30 million deal.

Swamy's plea had opposed clearance to the deal on the ground that according to government policy, FDI up to 49 percent is allowed in existing airlines which are already in operation and not to new or proposed joint ventures.

AirAsia India, to be based in Chennai, will see the Malaysian airline holding a 49 percent stake.