Govt gives nod to Tata-AirAsia's airline plan: Sources

The Foreign Investment Promotion Board (FIPB) seems to have cleared the Tata-AirAsia's joint proposal of starting an airline in India. According to sources, the initial investment in the proposed joint venture is expected to be around Rs 80 core.

The carrier will now have to approach the aviation regulator Directorate General of Civil Aviation (DGCA) for further clearances.

Earlier in the day, civil aviation minister Ajit Singh had said that the proposed Tata-Air Asia JV could face some procedural delays. The Minister, however, did not further elaborate on this statement.

Meanwhile, the Tata group will have 30 percent stake in the venture, while Air Asia's share will be 49 percent. Did you read:  To continue with 49% FDI, FII in aviation: DGCA guidelines

Air Asia's chief Tony Fernandes has even tweeted about selecting a CEO for his India venture. "That is the level of confidence that AirAsia has, as far as this proposal is concerned,"  he said.

In an earlier interview with CNBC-TV18, he had even said that Indian parties will play major role in running the airline and board representation will be proportional to investment. "We hope to start operations with USD 30-50 million and the big opportunity for us would be to devise a cost structure that will stimulate market. We are here to create a new market and address new routes," he had said.

Last month, Fernandes had said his proposed airline will focus on the Indian domestic market, with Chennai as the main hub. The AirAsia venture plans to start flights at the year-end with three-four planes and an initial investment of about $30 million. It will operate from Chennai and focus on providing domestic connectivity to smaller cities, stated a recent statement by the airline.