There was an interesting development in the aviation this week. Singapore Airlines and Tata Sons announced that they would form a new full service Indian airline.
Singapore Airlines would own 49% of the airline and Tata Sons 51%. The airline would be based in New Delhi.
Singapore Airlines already owns SilkAir, a full service short haul airline, and Scoot, a long haul discount airline. Singapore Airlines also hold stakes at the Singapore based discount carrier Tiger and Sydney based Virgin Australia. The airline sold its stake on Virgin Atlantic to Delta Air Lines last year.
The Indian partner, Tata Sons, is also partnering with AirAsia and other Indian company to launch discount carrier AirAsia India this year.
It is interesting that Tata Sons are both in bed with Singapore Airlines to launch a full service airline and with AirAsia to launch a discount carrier both at the same time. One would imagine that there would be a conflict of interest.
The Indian aviation sector is not profitable. Eihad bought part of Jet Airways earlier this year. The Kingfisher airlines was grounded last year and none of the airlines besides Indigo is making money.