Shares of three listed airlines, Kingfisher Airlines, Jet Airways and SpiceJet, reversed their early morning gains, after a final decision remained elusive in the Union Budget for allowing foreign carriers invest in domestic players.
Announcing his budget proposals, finance minister Pranab Mukherjee said that the external commercial borrowings to the extent of $1 billion would be allowed for the aviation sector for the next year.
He further said that the proposal to allow foreign airlines to participate direct or indirectly in India is being considered actively. While the absence of a final decision, as expected by the sector, disappointed the investors, the market analysts said, the move on foreign loans was a good move.
Kingfisher Airlines stock was trading with a gain of over 2% at 1145 hours, albeit down from over 4% earlier in the morning. Jet Airways, however, lost momentum and slipped into red with a decline of 1.8%, while SpiceJet dropped 4.4%.