Jan 11 The Indian cabinet will soon
consider whether to let foreign airlines buy stakes in Indian
airlines, the Press Trust of India reported, quoting the
country's civil aviation minister.
India bars foreign airlines from owning stakes in Indian
carriers. Other foreign investors are allowed to invest in
Indian airlines as long as the total does not exceed 49 percent.
"Finally, the Cabinet will take the decision," Ajit Singh
was quoted as saying in the report on Wednesday. "The Committee
of Secretaries has already recommended raising the FDI (foreign
direct investment) limits in the sector."
A group of ministers will meet shortly to take a decision on
the issue, he said.
Under Singh's predecessor, Vayalar Ravi, the civil aviation
ministry had proposed allowing foreign airlines to invest less
than 26 percent in Indian carriers.
Last week, the Economic Times newspaper reported that the
ministry was likely to drop its opposition to higher investment
by foreign airlines and agree to let them hold up to 49 percent.
The higher permissable investment would come as a lifeline
to India's struggling carriers, notably debt-laden Kingfisher
Airlines, which is struggling to raise funds.
Shares in all three listed airlines -- Jet Airways,
Kingfisher and SpiceJet -- ended up 5-7
percent after the minister's comments.
Singh ruled out a government bailout of any private airline,
saying private airlines should come up with workable business
plans and then seek loans from banks.