New Delhi: Thanks to the government's decision to allow foreign airlines to acquire up to 49% stake in domestic airliners, the possibility of Indian passengers flying in a Lufthansa or Etihad on Mumbai-Delhi route has become realistic. Yet it may not materialise on the ground due to structural issues that have marred Indian civil aviation sector for long. Unless that’s sorted out, systemic issues may continue to plague the sector in the short-to-medium term.
The government’s move is expected to bring strategic investors into the sector (earlier restricted to non-airline investors) at a time when most domestic carriers are in dire need of capital to reduce accumulated losses and mounting debt levels. Isn’t it a bit naive to think that foreign airlines will buy stakes in loss-making domestic carriers at a premium, factoring in high fuel and operational costs?
21/09/12 Rohit Joshi & Ajay Vaishnav/Daily News & Analysis
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The government’s move is expected to bring strategic investors into the sector (earlier restricted to non-airline investors) at a time when most domestic carriers are in dire need of capital to reduce accumulated losses and mounting debt levels. Isn’t it a bit naive to think that foreign airlines will buy stakes in loss-making domestic carriers at a premium, factoring in high fuel and operational costs?
21/09/12 Rohit Joshi & Ajay Vaishnav/Daily News & Analysis
