India's airline companies may have to wait a little longer to sell stakes to their foreign counterparts even if the government wakes up and allows it. That's indication one gets from the comments by Tim Clark, President, Emirates, in the Economic Times.
Will the government and the companies be able to assure a "clean balance sheet, no debt, guaranteed firewall against government interference, freedom to procure assets in a free and transparent way" in the near future, asked the Emirates head. Doubtful is the realistic answer.
Two cases in point are Kingfisher Airlines, which is straddled with debt, and Air India, which is a living (dying?) example of how government can kill a company it owns.
With a 49 percent stake, which does not give management control, how can foreign companies rest assured that their investment in Indian companies will pay off? "Buying into Indian airlines means putting equity into them first. Then one has to have a business plan... It is its implementation in the environment which is a challenge," Clark is quoted as saying in the interview.
His concerns are not misplaced considering that there are no Indian airline Companies that are making profits. Clark is not the only one who is expressing such concerns.
"You have got to address that big white elephant Air India," said Azran Osman, the chief executive of Malaysian low-cost carrier Air AsiaX to Reuters.
Air AsiaX has suspended its India operations recently. "If it continues to behave the way it is, you can make it 100 percent foreign ownership, and no one's going to be attracted." But Clark is not all pessimistic. He doesnt write-off India altogether. It has not missed the bus to be an aviation hub, he says. "They have problems, alright, but they need to have focussed appropproach towards civil aviation," he says.
Is anybody listening?!