FDI in Aviation May Benefit Future Fliers

Indian officials have been signaling that the Cabinet later Friday may decide to clear a long-awaited and much-demanded reform for the bleeding aviation sector by allowing foreign airlines to buy directly into Indian carriers.
The most likely scenario is the permission for foreign airlines to purchase up to 49% of Indian carriers. Foreign companies are allowed to own stakes in local airlines, but overseas airlines were barred.
But if the government opens the way, will anyone fly in?
Foreign carriers such as British Airways PLC and Virgin Atlantic Airways Ltd. have expressed interest in investing in India’s market, but it isn’t clear which overseas airline — if any — would want to immediately pour money into India’s loss-making companies.
India was once vaunted as the answer to dipping growth in other parts of the world, so much so that the government barred foreign carriers from owning stakes in India’s airlines. The main fear – ironically – was that foreign carriers would flood the market with cash, buying stakes and taking over India’s skies.
14/09/12 Santanu Choudhury/Wall Street Journal

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Categories: Foreign Sep 2012, New Sep 2012