Foreign airlines may win India investment rights

Mumbai: Singapore Airlines, Virgin Atlantic Airways and other carriers may win the right to buy into Indian airlines as the world's second-fastest-growing major economy plans to scrap investment restrictions.
India's government is considering allowing overseas airlines to own stakes in local carriers, Civil Aviation Minister Praful Patel told reporters on January 14. That would reverse a more than a decade-old rule that banned them from owning shares of domestic carriers.
With global traffic plunging amid a recession, India's move may give foreign airlines a slice of a market that's set to surge nine-fold in the two decades to 2026, according to Airbus SAS. The plan will also give carriers such as Jet Airways and SpiceJet access to cash and expertise amid a record $2 billion industrywide loss last year.
“In a global recession, foreign carriers will look at any opportunity where they can make a bit of money,” said Viswanathan Vasudevan, who helps manage $300 million at Aquarius Investment Advisors Pte in Singapore. “India seems to be one of the countries where you have some opportunity. That could be a big plus.”
Vasudevan may purchase Indian airline shares if the government eases restrictions for foreign carriers.
Seven new airlines have been set up in the past six years and passenger numbers doubled between 2004 and 2007, the government said.
India's domestic air traffic will grow 11.5 percent in the 20 years to 2026, making it the world's fastest-growing aviation market, according to Toulouse, France-based Airbus, the world's largest planemaker. In comparison, China's domestic traffic will grow 8.4 percent and the U.S., the world's largest aviation market, will grow 2.4 percent, according to Airbus.
26/01/09 Vipin V Nair/Business Standard

To Read the News in full at Source, Click the Headline

Categories: Foreign Jan 2009, Indian Aviation- In General Jan 2009