Naresh Chandra panel moots opening up aviation sector

New Delhi: The Naresh Chandra Committee has recommended that foreign airlines be allowed to pick up a 49 per cent equity stake in the domestic and international scheduled air transport services with the approval of the Foreign Investment Promotion Board.

This marks a significant liberalisation over the existing policy, which while barring foreign airlines from entering the fray, permits equity participation through foreign direct investment (FDI) up to a 40 per cent stake in domestic airlines.

Besides, in a bid to expedite the process of privatisation of Air India and Indian Airlines and facilitate transfer of the management to strategic private investors, the committee has recommended that the Government may consider private placement of the shares of the two airlines with domestic financial institutions and foreign institutional investors.

``This consortium should be allowed to appoint a management team of their choice and exit at their volition,' the committee has said in its report.

With regard to the State-owned helicopter corporation, the committee has recommended that the Government should divest its stake in Pawan Hans Helicopter Ltd and thereafter go in for an initial public offering.