Foreign airlines for a local bailout?

New Delhi: Desperate times call for desperate measures. With the aviation industry in the grip of a severe recession, the ministry of civil aviation is leaving no stone unturned to bring domestic carriers back from the brink.
So, along with myriad suggestions on reducing tax burden on aviation turbine fuel and a whole range of other aviation activities, the ministry has quietly mooted a proposal seeking foreign airlines’ investment in Indian carriers.
It has also suggested that the present foreign direct investment (FDI) limit of 49% be relaxed.
Sources said these two suggestions have been made keeping in mind the very low capital base of almost all domestic carriers and the urgent need to improve their financial situation.
Pointing out that even for Nacil, the capital base is a mere Rs 150 crore, a source said, “The issue is not about increasing FDI but allowing foreign airlines to come and invest in Indian carriers so that the latter get access to funds.”
Present norms allow only 49% FDI and that too by non-air transport companies. Foreign airlines are barred from investing in any form in Indian carriers.
18/08/08 Sindhu Bhattacharya/DNA MONEY/Sify

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Categories: Foreign Aug 2008, Indian Aviation- In General Aug 2008