Mallya asks government to allow foreign airlines to pick up equity in domestic carriers
26 Sep 2008
Mumbai: Taking the proverbial bull by the horns, Kingfisher Airlines-promoter Vijay Mallya, has made a formal request to the civil aviation ministry asking it to allow foreign carriers to invest directly in his airline and other domestic carriers. In an interview with a national daily, Mallya said he has asked the government to allow foreign carriers to pick up 25 per cent equity in domestic airline companies.
The last time a domestic company attempted to operate jointly with a foreign airline was when the Tata Group and Singapore Airlines attempted to link up in a joint venture in 2001. Singapore Airlines was due to hold a 49 per cent share.
Speaking to the Business Standard, Mallya said, ''If foreign companies are allowed to invest directly in other Indian sectors, why should civil aviation not be opened up for such investments? I have requested the government to consider this policy change and allow foreign carriers to have a strategic investment in airlines here.''
Claiming that investments by foreign carriers would actually be a boon for domestic players, Mallya said. ''All airlines, whether it is Jet Airways, Air India or Kingfisher Airlines, will benefit from such a move. The government should let it happen now.''
Changed circumstances in the sector, with airlines the world over facing massive losses, compel the government to mull a change in policy. Kingfisher alone has suffered losses of Rs1,000crore in the last fiscal.
Mallya also said he would resist moves by foreign airlines to arrive at franchise agreements with domestic carriers. The civil aviation ministry is studying a proposal from British Airways for a franchise agreement with an Indian carrier.
