Aviation minister Ajit Singh said on Tuesday his ministry will prepare a cabinet note to allow foreign airlines to take up to a 49 percent stake in Indian carriers
India took a big step to open up its hard-pressed aviation sector to investment by foreign airlines, with the aviation ministry saying it would recommend that the cabinet allow foreign carriers to take up to a 49 percent stake.
India bars foreign carriers from buying into Indian airlines, but foreign investors are allowed to invest up to a cumulative 49 percent stake.
"The question was to allow other airlines to participate in FDI. I discussed it with the finance minister and he agreed," Civil Aviation Minister Ajit Singh told reporters.
"We will move the note to the cabinet now."
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FDI may seem to be a huge boon but the stocks being what they are, a 49% investment would amount to peanuts in todays scenario. The death grip of taxes, fuel costs, AAI charges, low yield ticketing, inefficient operations and poor management practices need to be addressed prior to any such pronouncements. LCC are carrying loads almost to capacity on all routes but still seem to be in the red. The fatal flaw needs to be identified, isolated and subsequently kept at bay for this industry to survive
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