Private airlines today welcomed the much-awaited policy change ushering in foreign direct investment (FDI) by overseas carriers,saying the policy will give a big boost to the ailing sector.
“The FDI in airlines will open up a wide range of opportunities for both domestic as well as foreign carriers which wish to participate in the strong growth potential for civil aviation in our country,” Vijay Mallya-owned Kingfisher Airlines said in a statement here.
Expressing hope that the move will enable the carrier to re-engage with prospective investors in a more meaningful manner,it said the government decision would help the airline recapitalise and ramp up its operations.
Kingfisher Airlines Chairman Vijay Mallya termed the government decision to allow 49 percent FDI in airlines by foreign carriers as bold and fantastic.
“Bold decisions taken by the government. Fantastic to restore confidence and kick start economic growth…,” he said on micro-blogging site Twitter immediately after the decision.
Naresh Goyal-led Jet Airways also welcomed the move.
“We welcome any policy (decision) initiated by the government,” Jet said.
Reacting to FDI in domestic airlines,founder of the low-cost airline model Captain GR Gopinath said that the move needs to be seen in its totality than only from the investment point of view.
“It is good for the industry and the common man. We need more airlines and this move will bring a number of overseas carriers to India,” Gopinath said,adding the overseas players will now engage in talks with the domestic airlines more seriously.
“The government was only talking about it. But now with this bold step,some concrete proposals are expected to come through,” he said.
SpiceJet,which could not be contacted today,had said yesterday that it was in talks with a number of Gulf-based carriers to dilute its stake as and when the government allows such a policy measure.
“We are in talks with a number of Gulf-based airlines for equity participation if the government allows it. As everything depends on the policy decision,I cannot comment anything more on this,” a SpiceJet spokesperson had said,without divulging more details.
Meanwhile,the Abu Dhabi-based Ethihad Airways today said it has identified equity investments in other airlines here.
“Equity investment strengthens our relationships and allows us to work together with partners to identify revenue generation and cost management opportunities. We see equity as a positive reflection of our partnership approach.
“We will make such investment where we believe the commercial prospects are strong,where we see like-minded business philosophies,” a Etihad Airways spokesperson said in a statement hours before the Cabinet cleared the FDI policy.
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