New Delhi: Foreign airlines will be allowed to invest only up to 49 per cent in Air India and they won’t get complete operational control as the Centre has rejected a plan to ease the Substantial Ownership and Effective Control (SOEC) clause. The government has decided to divest its entire stake in Air India and its no-frill subsidiary Air India Express.
“There was a proposal to relax the SOEC norms but the aviation ministry has rejected the proposal on the grounds that it would give away the airline sector to foreigners and would mean the Indian government losing control over airlines running in India,” a senior government official familiar with the matter told the Economic Times.
Under SOEC, even at airlines with 49 per cent foreign airline ownership, more than 60 per cent of board members and the chairman have to be Indians. Operational headquarters have to be located in India. The official states that the proposal had been discussed within the government but not sent to the home minister-led committee that’s supervising the national airline’s sale.
Last week, the government had finalised the draft Expression of Interest (EoI) document for the privatisation of the ailing national carrier. Plus, the committee also approved all proposals, including the transfer of Air India's debt of around Rs 60,000 crore to the special purpose vehicle. In 2018, the government had failed in its attempt to sell a 76 per cent stake in Air India due to a lack of interest from bidders.
13/01/20 ETNowNews.com
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“There was a proposal to relax the SOEC norms but the aviation ministry has rejected the proposal on the grounds that it would give away the airline sector to foreigners and would mean the Indian government losing control over airlines running in India,” a senior government official familiar with the matter told the Economic Times.
Under SOEC, even at airlines with 49 per cent foreign airline ownership, more than 60 per cent of board members and the chairman have to be Indians. Operational headquarters have to be located in India. The official states that the proposal had been discussed within the government but not sent to the home minister-led committee that’s supervising the national airline’s sale.
Last week, the government had finalised the draft Expression of Interest (EoI) document for the privatisation of the ailing national carrier. Plus, the committee also approved all proposals, including the transfer of Air India's debt of around Rs 60,000 crore to the special purpose vehicle. In 2018, the government had failed in its attempt to sell a 76 per cent stake in Air India due to a lack of interest from bidders.
13/01/20 ETNowNews.com
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