India eases airline investment rules

India eases airline investment rules

The response of the Singapore Airlines was regarding the Indian government permitting foreign airlines to have up to 49 per cent stake in Air India and whether SIA would bid for the carrier.

Air India has grown to become a mega global airline with a network of 34 destinations across the USA, Europe, Australia, Far-East and South-East Asia and the Gulf.

It is mention worthy that Singapore Airlines owns 49 per cent stake in full service carrier Vistara, while the remaining shareholding is with the Tatas.

"Air India has been facing losses for the past many years on account of a multitude of factors like high fuel prices, high-interest burden, increasing competition especially from low-priced carriers, high debt-equity ratio, and high airport charges", Jayant Sinha, India's Minister of State for Civil Aviation said last week.

Last week, Leslie Thng, CEO, Vistara said that Tata Sons and Singapore Airlines have an "open mind" on the issue of the Air India disinvestment and that they will evaluate any potential business case therein.

The Indian government has allowed foreign airlines to have up to 49 per cent stake under the approval route in Air India subject to certain conditions.

The Centre of Indian Trade Unions (CITU) on Thursday denounced the decision of the government to allow 49 per cent foreign direct investment (FDI) in Air India, and said it was aimed at expediting the privatisation of the national carrier.

Currently, Air India is incurring a net loss of $569 million annually as per the latest official data presented by India's Civil Aviation Ministry in the Parliament.

In a move that beckoned the BJP government's strong FDI reform drive, the cabinet yesterday permitted foreign airlines to own up to 49 percent stake in India's national carrier-Air India at a time when the process for strategic disinvestment of the airline is in the pipeline.

"Substantial ownership and effective control of Air India shall continue to be vested in Indian national", the release said.

This is unedited, unformatted feed from the Press Trust of India wire.

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