Mallya meets Sharma on aviation FDI

New Delhi: Crisis-hit Kingfisher Airlines chairman Vijay Mallya today met Commerce and Industry Minister Anand Sharma in New Delhi. The meeting comes in the backdrop of a government proposal seeking permission to allow foreign carriers to pick up stake in domestic airlines.

The industry ministry has circulated a Cabinet note for the same.[caption id=“attachment_273002” align=“alignleft” width=“380” caption=“Looking for funds. Reuters”] [/caption]

India now does not permit foreign airlines to buy stake in domestic airlines, although foreign investors are allowed to hold 49 percent.

Accepting a major demand of the cash-strapped aviation industry, the government on January 17 decided to launch the process to allow foreign airlines picking 49 percent stake in Indian carriers.

Allowing foreign airlines to buy stake in domestic carriers is expected to benefit Kingfisher Airlines, which is burdened by a debt of over Rs 7,000 crore.

Kingfisher is strongly pitching for permission to allow foreign airlines to invest in domestic carriers.

Kingfisher shares closed 6.43 per cent up at Rs 19.85 today on the BSE.

India’s civil aviation sector grew at 18.5 percent in the last seven years and the government has taken various steps to resolve the woes faced by airline industry, the Economic Survey for 2011-12 had said.

PTI