Proposal to allow 49% stake for foreign airlines in domestic carriers

New Delhi: The Civil Aviation Ministry’s proposal for allowing foreign airlines to pick up a stake in domestic airlines has moved ahead. Later this week the Committee of Secretaries headed by the Cabinet Secretary is to consider a proposal to allow foreign airlines to hold a 49 per cent stake in scheduled, non-scheduled and charter airlines.
The latest thinking in the Government is more liberal than the 20-25 per cent stake that the Ministry of Civil Aviation has proposed for foreign airlines in domestic airlines. The change in the FDI rules, if approved, will not only help the 15 scheduled airlines like Kingfisher and Air India but also the 98 non-scheduled operators including Ahmedabad Aviation and Aeronautics and Span Air. Official sources confirmed to Business Line that an “official proposal” to allow foreign airlines to hold a 49 per cent stake in domestic airlines is before the Government.
At the moment foreign airlines are barred from holding a direct or indirect stake in the domestic airline sector. Speaking to newspersons, the Minister for Civil Aviation, Mr Praful Patel, had indicated that the Ministry was examining a proposal to allow foreign airlines to hold a 20-25 per cent stake in domestic airlines. A final decision on how much stake foreign airlines will be allowed to hold in domestic airlines will be taken by the Union Cabinet and not the Group of Ministers looking into the civil aviation policy, Mr Patel had said.
20/01/09 Ashwini Phadnis/Business Line

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

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