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Aviation shares surge on FDI hopes; SpiceJet up 7%

Aviation shares surged on hopes the government will allow foreign airlines to pick up stakes in their Indian counterparts. The cabinet is expected to take up the proposal for consideration today.

Jet Airways was up 4.3 percent at Rs 377 and SpiceJet 7 percent at Rs 35.40. Kingfisher Airlines was up more than 9 percent at Rs 10.97.

AFP

A report on Arabian Business website said SpiceJet may have held talks with Qatar Airlines for a stake sale.

While CEO Niel Mills has confirmed the company has held discussions with Gulf carriers for a stake sale, he has refused to disclose the names of the companies.

"There have been preliminary discussions to check in principle whether there is interest on both sides and the confirmation there would be 'yes there is'," Mills has been quoted as saying in the report.

The FDI in aviation has been under consideration for a while, as the government continued to face resistance from its allies to the proposal.

The FDI is much-needed for the funds-starved airline companies in India.