Decision to allow international carriers to invest up to 49% in domestic airlines has been approved except saying ‘yes’ by cabinet.
This step would really sort out the cash flow management related problems in Indian aviation sector that are at present a big headache for Indian airlines like Kingfisher and Go Air.
After attending a meeting with Pranabh Mukhrjee, the Civil Aviation Minister Ajit Singh informed to Media, “49% FDI is already there.
The question was to allow foreign airlines to participate in FDI. I discussed the matter with the finance minister and he agreed. We will move a note for the cabinet now.”
However there may be chances of increasing the limit of FDI for more Capital access that proved beneficial to rescue the debt crisis of civil aviation sector.
Excepting British Airways, Singapore Airlines and Emirates that are banned from direct investment into the aviation sector, remaining foreign airlines investors can invest up to 49% in Indian airlines.
From this meeting one decision to allow Rs. 150 crore loans in form of restructuring to Air India is also put into light.
From past few months Air India has faced a situation of outstanding due over salaries of its employees and it is expected that the group of ministers would take a decision on Air India’s loan restructuring in the next meeting.
Although Cabinet approval is still needed, but as per yesterday stock records share of Jet Airways and SpiceJet raised by 10% and Kingfisher that facing debt crisis gained 5%.