Kingfisher wants nod to sell part stake to foreign carriersNovember 17th, 2008 - 4:05 pm ICT by IANS
New Delhi, Nov 17 (IANS) Kingfisher Airlines has sought permission from the government to sell a part of its equity to international carriers, saying a change of policy on foreign investment will enormously help the Indian aviation industry that was facing turbulent weather.”I have requested the Indian government to allow foreign airlines to buy up to 25 percent in Indian carriers,” the flamboyant chairman of the carrier Vijay Mallya said in a statement Monday, asking the aviation sector to be treated on par with other sectors.
“This will create enormous wealth and secure the future of the Indian aviation,” said Mallya, wanting a change in the government’s policies that allows foreign investment into the sector, but not from foreign carriers.
“I have received several expressions of interest from foreign airlines. However I cannot give details.”
In the past, some domestic airlines even had to buy back equity from foreign carriers after the government decided only non-resident Indians and foreign companies operating in areas other than aviation can have stakes in domestic airlines.
Mallya, who is also a member of parliament, has made the plea at a time when Indian carriers are losing between Rs.100-Rs.150 million ($2-$3 million) every day, with the industry wanting the government to take some measures to arrest the losses.
His Kingfisher Airlines had also entered into a strategic and operational alliance with rival private carrier Jet Airways, promoted by Naresh Goyal, saying it was necessary to ensure the health of both carriers.
As per the present policy, formulated in July 2005, foreign equity of up to 49 percent and non-resident Indian investment of up to 100 percent is permissible in the domestic air transport services through the automatic route.
But equity from foreign airlines is not allowed, either directly or indirectly, in domestic carriers.
Prime Minister Manmohan Singh has expressed concern about the health of the domestic aviation sector.
He defended the recent move by state-run oil firms to give more time to the domestic carriers to settle their fuel dues, saying the government was concerned about the potential job losses in the sector.
“There is an employment angle to be looked at. If airlines close down, there will be considerable unemployment. We don’t want unemployment to become more acute, more pronounced,” the prime minister had said last week.
“It is not a question of helping the rich. It is helping the middle class people - those who will lose their jobs in case the companies were to make losses year after year.”
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Tags: air transport services, aviation sector, carrier jet, domestic airlines, expressions of interest, foreign airlines, indian aviation, kingfisher airlines, manmohan singh, prime minister manmohan singh