Jet & Kingfisher alliance face turbulence over FDI issue

Jet Airways and Kingfisher Airlines, both leading private sector airlines are facing turbulence in their strategic alliance due to the issue of FDI participation by foreign airlines in the domestic aviation sector, reports Economic Times.
The alliance was formed last October to streamline capacity, rationalize routes and to bring about a code-sharing arrangement.
While Jet Airways didn`t see any value coming out from allowing international airlines from picking up stake in domestic carriers; Kingfisher Airlines chairman Vijay Mallya has written to the government to allow FDI in domestic carriers. Even, Kingfisher is believed to be discussing a stake sale of 25% with three foreign airlines.
As per current regulations, foreign carriers are not allowed to hold equity, either directly or indirectly, in domestic airlines. India is the only country where foreign institutional investors are allowed to invest in the aviation sector with a FDI cap of 49%.
05/02/09 Myiris

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Categories: Jet Airways Feb 2009, kingfisher Feb 2009