Govt likely to decide on aviation FDI on Thursday - official

NEW DELHI Wed Apr 11, 2012 10:09am IST

A passenger aircraft is silhouetted against the setting sun in New Delhi October 12, 2008. REUTERS/B Mathur/Files

A passenger aircraft is silhouetted against the setting sun in New Delhi October 12, 2008.

Credit: Reuters/B Mathur/Files

Stocks

   

NEW DELHI (Reuters) - The government is likely to decide on a proposal to allow foreign carriers to invest in local airlines as early as Thursday, a senior government official said, which could provide a lifeline to cash-starved and debt-laden carriers like Kingfisher Airlines (KING.NS).

"The decision is imminent," said the official at Department Of Industrial Policy and Promotion, referring to a proposal to allow foreign carriers to invest in local airlines.

"It may be as soon as Thursday."

He, however, declined to say what the proposed foreign investment cap would be.

Indian airlines have been battered by rising fuel costs, high taxes and fierce competition in a market where five of the six main operators are losing money.

India currently bars foreign airlines from picking up stake in Indian carriers, although foreign investors are allowed to hold a cumulative 49 percent.

The country's civil aviation ministry had in January recommended that the government allow foreign airlines to buy stakes of up to 49 percent in Indian carriers. The proposal, however, needs approvals from the trade ministry and the union cabinet to become law.

Kingfisher Airlines, which has a debt load of $1.3 billion, has said foreign airlines have expressed interest to invest in the company, and that those investors are just awaiting a formal government approval.

Kingfisher shares, which were down as much as 4.6 percent earlier in the day, closed 7.5 percent up at 18.60 rupees on Tuesday on the National Stock Exchange.

(Reporting by Matthias Williams; writing by Anurag Kotoky; editing by Malini Menon)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared
People walk in the Wipro campus in Bangalore June 23, 2009. REUTERS/Punit Paranjpe/Files

Wipro Q4 net profit beats estimates, rises 29 percent

Wipro posted a 29 percent rise in its fourth-quarter net profit, beating expectations, helped by increased IT spending by its customers. For the quarter ended March 31, the company said it earned 22.27 billion rupees compared with 17.29 billion rupees a year earlier.  Full Article | Full Coverage 

REUTERS SHOWCASE

Literary Giant Dies

Literary Giant Dies

Nobel winner Garcia Marquez, master of magical realism, dies at 87.  Read 

Election 2014

Election 2014

India holds biggest day of voting with BJP gaining strength  Full Article | Full Coverage 

Insider Trading

Insider Trading

Ex-Goldman director Gupta starts prison term on June 17.  Full Article 

Market Eye

Market Eye

Sensex jumps 351 points, snaps 3-day losing streak  Full Article 

Expansion Plans

Expansion Plans

Reliance Industries, HPCL Mittal plan refinery expansions.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Deal Talk

Deal Talk

Piramal to buy 20 percent stake in Shriram Capital for $334 million.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage