PMO pushes for higher FDI in airlines

New Delhi: The Prime Minister’s Office (PMO) has pushed for allowing foreign airlines to pick up stakes in Indian carriers along with a significant say in their management. It has asked the civil aviation ministry to support Indian airline companies’ plans for rapid fleet and route expansion with such a policy action.
The PMO has specifically told the ministry in a recent letter to promptly include the proposal on the agenda of the group of ministers (GoM) on aviation, official sources told FE.
The move is expected to lead domestic airlines to adopt global best practices, besides opening new funding vistas at a time when air traffic growth has peaked. The PMO initiative also coincides with the improved liquidity position of many foreign airlines which went through a bad patch during the economic downturn of the last two years.
Currently, FDI up to 49% is allowed in domestic aviation, but foreign airlines are barred from investing on the grounds of national pride and security. The proposal is to allow at least 26% FDI by foreign airlines, which would entail their presence on the airlines’ boards. Sections of the government including the department of industrial policy and promotion, the nodal agency for FDI policy, have pitched for an even higher stake of 49%.
23/06/10 Nirbhay Kumar/Indian Express

To Read the News in full at Source, Click the Headline

Categories: Foreign Jun 2010, Indian Aviation- In General Jun 2010