Finmin may back DIPP proposal on airline FDI

New Delhi: The finance ministry is likely to support the proposal from the industry department for allowing foreign carriers to buy up to 26% equity stake in Indian airlines. The ministry’s inclination to endorse the move, also backed by the civil aviation ministry, was confirmed to FE by senior officials.
The development is significant since two of the top private carriers — Jet Airways and IndiGo — have opposed the move arguing domestic airlines are financially weak compared to foreign carriers and hence it could trigger hostile take-over of Indian companies.
Vijay Mallya-promoted Kingfisher Airlines has been lobbying hard with the government for relaxing the foreign direct investment (FDI) hoping it would help them access funds from foreign airlines like British Airways.
“Opening up the sector will be beneficial as more competition needs to be encouraged and will improve efficiency.
24/11/11 Nirbhay Kumar/Himani Kaushik/Financial Express

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Categories: Foreign Nov 2011, Indian Aviation- In General Nov 2011, New Nov 2011