Aviation crisis: PM to meet private airline officials

New Delhi, Nov 25: Civil Aviation Minster Vayalar Ravi on Friday (today) said that Prime Minister Manmohan Singh will meet private airline officials on Saturday (Nov 26). The meeting is expected to discuss the current financial crisis faced by most of the domestic airlines. Country's private airlines like Kingfisher airlines, Jet Airways and Spicejet have all reported loss due to hike in fuel price and high operational cost.

Meanwhile, the meeting may also discuss the proposal to allow foreign direct investment (FDI) by foreign airlines in Indian airlines.

The Department of Industrial Policy and Promotion (DIPP) under the Commerce Ministry has directed 26 percent of FDI by foreign airlines in Indian airlines. Further, DIPP revealed that below 26 per cent FDI would not attract strategic investment from foreign airlines as, in that case, they will not have any powers to block a special resolution in a board meeting under the Indian company.

The present rules allow 49 percent of FDI in Indian aviation companies, but do not allow foreign airlines to have stake in India's airlines. Interestingly, some airlines in India opposed FDI as they doubt that foreign investors may finally take over the carriers they invest in. The cash-strapped Kingfisher airlines has been urging the government to allow foreign partners to invest in Indian airlines.

OneIndia News