Whom will this affect: The Tata Singapore Airlines project, which was already in hot water because of Ibrahim's opposition to it, is effectively killed.

It also puts a question mark on the future of Jet Airways -- 20 per cent of its equity is owned by Gulf Air and another 20 per cent by Kuwait Airways.

Whom will this affect: Until now, only existing airlines could import large aircraft and even then, after a case by case appraisal by the civil aviation ministry.

It is now left to the operator to decide the type and make of the aircraft he wishes to operate. Individuals can import aircraft if they want -- provided the ministry certifies the plane as being airworthy.

Whom will this affect: If operators find the airline they are running is not commercially viable, they can now take their money out without any hitch. Makes investment attractive but leaves the sector unstable and vulnerable.

Whom will this affect: Almost all private airlines, including East West, which is running only one aircraft, and Sahara Airlines which currently has three aircraft but has managed to keep its head above water so far.

Whom will this affect: Almost all private airlines. They will need more money spread over a broader base to stay afloat.

Whom will this affect: The finance minister. Because this means India's fiscal deficit on account of the oil pool deficit remains untouched.

The Tata-SIA project

In February 1995, Tata Industries Limited and Singapore Airlines submitted an application to the FIPB to set up an airline, called Tata Airline. Its stated objective was to provide India with a domestic airline of International standards.

The main features of the proposed airline are:

Ownership: Sixty per cent of Tata Airline will be in Indian hands (40 percent with Tata Industries and 20 per cent with Indian institutional investors). Singapore Airlines would hold 40 per cent.

Fleet: In the first year of its operation, Tata Airline would have a fleet size of seven aircraft. Over the next five years, this would go up to 19. Sources at Tata say that the airline plans to purchase and own new aircraft instead of taking aircraft on lease as is the common practice with other private airlines.

Infrastructure: Tata Airline would set up dedicated training and maintenance facilities including the construction of a hangar to undertake checks for its own aircraft. In addition, it will establish an aircraft simulation facility for its pilots and will also establish an advanced training centre for aircraft maintenance engineers.

Routes: in the determination of which sectors it would fly, Tata Airline would follow the policy laid down by the civil aviation ministry. In a letter to C M Ibrahim in July 1996, Ratan Tata undertook to fulfil the social obligations of flying certain sectors that Indian Airlines does.

Courtesy: Sunday magazine