Mallya calls for FDI in aviation
Kingfisher Airlines promoter Vijay Mallya asked the government to allow foreign airlines to invest in domestic carriers - a move that could prove to be a breather for financially crippled carriers like his.india Updated: Nov 15, 2011 23:09 IST
Kingfisher Airlines promoter Vijay Mallya asked the government to allow foreign airlines to invest in domestic carriers - a move that could prove to be a breather for financially crippled carriers like his.
"I am an avid supporter of FDI (foreign direct investment)," Mallya said on Tuesday. "I don't see any reason why FDI from strategic partners like an airline should be banned or not permitted. Who would understand an airline better than another airline? I hope government will consider it seriously."
India allows foreign investment of up to 49% in Indian carriers, but foreign airlines are banned to invest directly or indirectly in domestic carriers.
"A general investor who has the opportunity in investing in other sectors may not care to look at an airline. We need equity to improve the position of balance sheets, not just Kingfisher but the entire industry," he said.
Private airlines in India have lost R3,500 crore in the six months ended September, more than the R2,900 crore they lost in all of 2010-11, according to lobby group Federation of Indian Airlines (FIA).
While the department of industrial policy and promotion (DIPP) favours a 26% cap on foreign airlines' holding, the aviation ministry wants it restricted to 24%. A holding above 25% gives the right to block a 'special resolution'.