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

   
Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

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

RAINFALL THIS YEAR

REUTERS SHOWCASE

Election 2014

Election 2014

Thousands mob Modi as election race starts in Varanasi.  Full Article 

Monsoon Forecast

Monsoon Forecast

Met office rules out surplus monsoon in 2014.  Full Article 

Facebook's Performance

Facebook's Performance

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

Earnings Season

Earnings Season

Bharti Infratel Q4 net profit jumps 64 percent.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

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