The Hindu Business Line : Govt may allow foreign airlines to take minority stake in domestic carriers

A senior Government official on Tuesday said that allowing foreign airlines to pick up between “20-25 per cent” stake in domestic airlines was one of the proposals being examined to help the beleaguered sector.

“The Government will have to examine what extraordinary steps can be taken to facilitate the industry.

“No firm decision has yet been taken,” the official said.

The proposal will have to be cleared by the Union Cabinet and not the Group of Ministers considering the civil aviation policy before it can be implemented, sources added. The issue of co-branding or allowing a domestic airline to take on the name of an international airline on domestic flights is not being “deliberated or discussed” at the moment, sources said.

Currently, foreign airlines are debarred from holding a direct or indirect stake in domestic airlines.

This, however, was not the position till late 1990s. At that time some international airlines including Gulf Air and Kuwait Airways held equity in Jet Airways. After the Government changed the policy, the Jet Airways promoters repurchased the equity.

When contacted, the Aviation Minister, Mr Praful Patel said, “There is no clarity on the issue. This is one of the proposals which could be considered.”

The nod for the proposal is likely to please several airlines. The promoter of Virgin Atlantic Airways, Sir Richard Branson, has already written to the Government seeking to invest in his personal capacity in the domestic aviation sector. The Government is yet to respond to the communication. Mr Vijay Mallya, Kingfisher Airlines Chairman, has also written to the Government on the issue.

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