Why Gulf carriers won’t invest in India airlines

India represents a major market for Gulf carriers, and with a developing middle class, a significant potential market for hundreds of millions of travellers by air. With India closing in on new regulations to permit foreign investment of up to 49 per cent in airlines in India, the market would seem ripe for Gulf carriers to quickly snatch up market share by investing in India’s domestic airlines and creating a market for feed traffic and connecting flights. While that is certainly the intent of India’s legislation, unfortunately, that scenario is quite unlikely.
Several factors that permeate the Indian airline industry will result in airlines from the Gulf concluding that the potential returns from investing in airlines in India will simply not materialise, and foreign direct investment makes no sense in this case.
07/08/12 Ernest S. Arvai/Gulf News

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Categories: Foreign Aug 2012, Indian Aviation- In General Aug 2012