Indian airline in plea for foreign stakes

New Delhi: Vijay Mallya, chairman of debt-laden Kingfisher Airlines, has urged New Delhi to allow foreign airlines to take stakes of up to 25 per cent in Indian carriers to help the ailing aviation industry survive pressing financial difficulties.
Mr Mallya, head of an empire that spreads from alcohol to aviation interests, said in an interview that he was "approached constantly" by foreign carriers seeking tie-ups with Kingfisher, which is one of India's two largest private airlines and renowned for its attentive service.
New Delhi prohibits international airlines from taking stakes in Indian carriers, even though it allows investors such as funds to take stakes of up to 49 per cent. "If a foreign airline that considers India an important strategic market is able to pick up 25 per cent, that could be a huge wealth creator. It will be a huge bonus to the industry; the values will shoot up very considerably," Mr Mallya said.
India's private airlines, including Jet, the premium carrier, and IndiGo and SpiceJet, the low-cost carriers, are scrambling for cash to help them cope with a squeeze stemming from rising costs and declining traffic.
Mr Mallya also said he expected the Indian government to move swiftly to slash state sales taxes of up to 26 per cent on jet fuel, which sharply raises carriers' costs.
In Taipei, Chew Choon-seng, chief executive of Singapore Airlines, said that the global downturn could encourage Asian governments to liberalise foreign ownership of airlines and create opportunities for industry consolidation.
15/11/08 Amy Kazmin/Financial Times, UK

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