India May Consider Foreign Airline Stakes - Report

January 14, 2009

India's aviation minister said there was a "more reasonable case" now than a few years ago to allow foreign airlines to buy stakes in local carriers, the Mint newspaper reported on Wednesday.

Kingfisher Airlines has requested the government let foreign airlines pick up stakes of up to 25 percent in Indian carriers. Kingfisher has said that foreign airlines had expressed interest in buying a stake in it.

The paper said aviation minister Praful Patel did not rule out the possibility of foreign airlines being allowed to buy a stake of between 20-25 percent in domestic carriers.

"There is a more reasonable case now than there was three-four years ago," the report quoted the minister as saying.

India does not allow foreign airlines to invest in domestic carriers, although foreign portfolio investments are allowed.

A global credit crunch has made fund raising difficult for Indian carriers and analysts have forecast them to collectively post losses of INR80 billion rupees (USD$1.6 billion) for the year to March 2009.

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