New Delhi, Mar 13 (): Air Asia’s Indian venture seems to have an air pocket over a comma in the cabinet decision policy note on FDI in aviation.
The Foreign Investment Promotion Board cleared the Air Asia JV with Tata and Bhatia. The aviation ministry had taken the stance that the cabinet decision was to allow FDI in existing Indian airlines and not for new ones. The Board found that a comma in the middle of a sentence altered the meaning that new ones were eligible for 49% FDI.
Civil aviation ministry officials are not convinced about the Board stance. Air Asia has not received official clearance yet. It would then move for permission from aviation ministry. The then Finance Minister Pranab Mukherjee with a group of ministers decided to allow 49% FDI in aviation. The cabinet decision does not make any difference between existing Indian carriers and those forming new ones. This ambiguity is what aviation ministry is asking for a clarification. The ministry feels that a suit could be filed on the licence to allow Air Asia to start a new carrier in India.
Aviation industry expects Finance Ministry to come out with a note clarifying that it was applicable to new carriers too. Legally, the chance of court accepting a suit going by the usage of a comma would not take place but if it chooses to, then it could be delaying the start.The easy way out is to release a Finance Ministry clarification on FDI and setting to rest the doubts over the comma usage and maybe add a few more commas to drive home the point. says analysts.
Meanwhile, Air Asia Tony wants Ratan Tata to be Chairman of the new airline. To be operating from Chennai as the hub, new carrier is to avoid costly airports like Delhi and Mumbai that charge huge user development fee. This has made Air India announce a scheme between Mumbai-New Delhi by which a ticket booked 60 days in advance would cost around Rs 3200 for a one-way ticket.