Tata SIA Airlines to Use A320s for Inaugural Operations

Thursday, 23rd January 2014 at 08:38am

According to a Tata spokesperson, the new airline will initially keep a fleet of 20 A320 jets for its inaugural operations flying to domestic routes. Indian aviation law prohibits any airline to fly to international destinations unless it satisfies the 5/20 rule, a policy that many airline operators want the government to scrap.

The 5/20 rule refers to the local aviation law that requires airlines to operate for at least 5 years and keep at least 20 aircraft in its fleet before they can open international routes. Industry experts consider the law as disadvantageous to local airline operators who want to expand their business and maximize the utilization of their aircraft.

The choice of a A320 fleet by the airline has further cemented Airbus dominance in the commercial aviation business in India.

The biggest Airbus operator in India is IndiGo with an all-Airbus fleet of 73 aircraft. By far, it is also the country's biggest airline in terms of market share. The flag carrier, Air India, has the second biggest Airbus fleet in the country with 64 of the A320 family. Even GoAir, India's smallest airline, has an all-Airbus fleet of 17 jets.

The new full-service carrier, which is a joint venture between India's largest business conglomerate, Tata Group and Singapore Airlines, is capitalizing on the extensive network of its mother unit.

Singapore Airlines has a global network of 62 destinations across 6 continents in 35 countries.

Tata Group is not new to aviation industry as it pioneered in the aviation business in India. In 1932, it founded Air India before the airline went into state control since 1953. Today, Tata Group is India's biggest business conglomerate and among the world's largest.

It has a majority stake in the new airline, owning 51% of the joint venture, while Singapore Airlines holds the remaining shares. The proposed airline, which has no official name yet, has an initial capitalization of $100 million for its maiden operations.

By: Pete Lee.