New Delhi, Oct 24 (IANS): The government Thursday approved the setting up of the joint venture (JV) airline between industrial conglomerate Tata Sons and Singapore Airlines with an investment of about $100 million.

The two companies' plan for the launch of a new full-service private carrier based in New Delhi was approved by the Foreign Investment Promotion Board (FIPB), which met here.

Economic Affairs Secretary Arvind Mayaram told reporters that the deal has been cleared.

A Tata Sons spokesperson said the company was yet to get any formal intimation from the FIPB.

"We are yet to hear from FIPB. However, we are delighted with the reports of clearance given to the proposed airline by the FIPB," the spokesperson told IANS.

Both the companies last month signed a memorandum of understanding (MoU) to launch an airline by investing $100 million and sought the FIPB's approval.

“This sends very positive signals to the global investor community," said Amber Dubey, partner and head, aerospace and defence at global consultancy KPMG.

"If they play it well, Tata-SIA has the potential to be among the top three airlines in India by 2015."

The majority stake in the proposed new airline will be held by the Tata Sons, who will own 51 percent, while the rest 49 percent will be with Singapore Airlines.