Bali: Tony Fernandes, the chief executive of Southeast Asia’s largest budget carrier, AirAsia, feels it is “critical” for India to further open up its aviation sector to foreign direct investment (FDI).
“I think it’s critical,” Fernandes told Business Standard. “I think capital needs to go into the airlines industry and regulation needs to change. There have been some sounds from the (Union) minister of commerce (Anand Sharma) on this.”
His comments came a day when the civil aviation ministry proposed to allow 24 per cent FDI into the sector, subject to Cabinet approval, and close on the heels of beleaguered Kingfisher Airlines boss Vijay Mallya's pleas for opening up the industry to international strategic investors.
India currently allows for FDI up to 49 per cent in the domestic airlines sector, but not by foreign airline companies. Nonetheless, many Indian carriers remain short of cash, and permitting the entry of these foreign investors would come as a shot in the arm for the industry.
Fernandes also said he would be open to picking up a stake in an Indian carrier if the sector was opened up. "Yes, absolutely. I am of Indian descent, so my father would be very happy," the Indian-origin Malaysian quipped.
18/11/11 Devjyot Ghoshal/Business Standard
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