Wednesday, April 12, 2006

Bar on foreign investment in domestic carriers may go

Foreign airlines may now be able to invest in domestic Indian carriers. That's if the government approves the new aviation policy.
CNBC-TV18 has learnt that the policy proposal will now go to the cabinet for its approval. There is a proposal for allowing 100% FDI in aviation design and manufacturing. The new policy proposes to hive off AAI activities into subsidiaries to allow it to tap the equity market.
The AAI employees will be given ESOPs in new subsidiaries. Every airport will have at least two ground handling SVC providers and DGCA will regulate air navigation services. The government also plans to dismantle PSU hold on Jet fuel supply.
Jet fuel will be notified as Declared Goods. There is also a proposal to create an Essential Air Services Fund with cess on travel.
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