New Delhi: The debt-ridden domestic airline industry is once again clamouring for permission to invite equity investment by foreign airlines.
But the civil aviation ministry is not game.
Top ministry officials have admitted that some airlines — notably Vijay Mallya’s Kingfisher — have been urging the ministry to consider their plea on allowing foreign airlines to acquire stake in domestic carriers.
This could take care of some of the sizeable debt on the books of almost all Indian airlines. As per existing policy, equity investment is totally banned by foreign airlines.
This issue was first raised in 2009, when the ministry began deliberations under the then civil aviation minister Praful Patel for allowing some investment by foreign airlines. This proposal was subsequently forwarded to other ministries (including the commerce ministry) for their views.
The civil aviation ministry had, at that time, recommended up to 26% equity investment by foreign airlines. But the proposal was never implemented due to security concerns raised by some ministries.
Now, after Vayalar Ravi took over the reins at the civil aviation ministry earlier this year, airlines have again sought clarity on the matter. But top officials in the ministry sought to underplay this issue.
29/08/11 Sindhu Bhattacharya/Daily News & Analysis
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