Aviation FDI hike to have riders

New Delhi: Even after the government hikes the foreign direct investment (FDI) cap in domestic airlines to 74% and allows foreign carriers equity in them, their role in management will be restricted.
According to a proposal by a section within the government, the voting rights of a foreign airline will be restricted and not in proportion to 26% they will be allowed to hold. Further, chairmen of the boards of Indian carriers and their chief executives must be resident Indian citizens.
These restrictions are to ensure that foreign airlines engage with Indian carriers just as investors. A foreign airline will also have no control over the running of a domestic carrier.
“The main worry is that the move will provide backdoor entries to foreign airlines. We are trying to address this concern,” said a government official.
Similarly, foreign carriers as equity partners will not have any say in scheduling the timetable of domestic carriers and ticket pricing.
29/06/07 Bipin Chandran/Financial Express

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Categories: Foreign Jun 2007, General Aviation Jun 2007