Indian conglomerate Tata and Singapore Airlines have signed a memorandum of understanding to establish a full-service airline based in New Delhi.

The companies have started seeking regulatory approval for the new carrier. Tata would own 51 percent of the airline and Singapore Airlines 49 percent. The airline, as yet unnamed, initially would fly only domestically because Indian carriers by rule cannot launch international services before five years of operation, although there is speculation this rule may be relaxed. The new airline is being planned at a time when all but one of India's major carriers are suffering financial difficulties in spite of booming demand. Earlier this year, Tata, which also has growing hotel interests, announced it would launch a low-cost carrier in Chennai in association with AirAsia of Malaysia.