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Air India against FDI in airlines

While cash-starved private carriers are advocating easing of investment rules to allow their foreign peers to pick stake in domestic carriers, state-run Air India has opposed any such move. HT Correspondent reports.

india Updated: Jan 23, 2009 22:32 IST
HT Correspondent

While cash-starved private carriers are advocating easing of investment rules to allow their foreign peers to pick stake in domestic carriers, state-run Air India has opposed any such move.

Foreign direct investment (FDI) in airlines has been a major area of debate among policy makers and industry stakeholders.

A group of ministers is currently undertaking a comprehensive review of India’s FDI regime, including the contentious decision of whether to allow foreign airlines to pick up equity in the country’s fledgling private aviation sector.

A meeting to discuss the issue slated on Friday was, however, postponed and no fresh date has been decided upon. Cabinet secretary was supposed to chair the meeting for inter-ministerial inputs.

“The government is a 100 per cent equity holder in Air India and any decision would be taken by the civil aviation ministry on advise of the government,” said an Air India spokesperson.

Indian aviation sector has slowed down to 5 per cent growth, after witnessing 35 per cent growth in the past two years. Experts feel FDI in domestic carriers would help the sector tide over the crisis due to low yields and fewer passengers.