Foreign Investment Could Boost India's Beleaguered Aviation Industry

New Delhi: India’s beleaguered aviation industry is hoping to be more profitable if the government allows foreign airlines to invest in the sector. So far, massive passenger growth has not translated into profits.
By the end of the financial year in March, India’s domestic airlines will have piled up losses of an estimated $2.5 billion. Coming on top of losses sustained in previous years, the aviation industry is deep in debt.
But the cash-strapped sector has finally heard some good news. A group of ministers this week agreed to allow foreign airlines to buy stakes of up to 49 percent in domestic carriers. The proposal - being seen as a lifeline for the industry - is expected to get formal approval in the coming weeks.
The Indian aviation industry is among the fastest growing in the world with traffic increasing by over 17 percent last year. But the industry continues to lose money.
That is largely because aviation fuel prices - already high due to local taxes - have risen sharply. However airlines have been unable to offset those costs by raising fares due to cut throat competition in the sector.
20/01/12 Anjana Pasricha/VOA News

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

Categories: Foreign Jan 2012