Foreign airlines can control Indian carriers via group firms

• Posted in Aviation
• on June 23, 2016
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While foreign airlines can’t directly own more than 49 per cent in Indian airlines, despite Monday’s liberalised Foreign Direct Investment (FDI) policy, their group companies or investors can fully own airlines in India with government approval.

So while the likes of AirAsia and Singapore Airlines will continue to have a cap of 49 per cent on their stakes in Indian arms, AirAsia India and Vistara, foreign funds and non-airline companies will be allowed to fully own a domestic, Indian airline.

The government is looking to dilute the rule which makes it mandatory for an Indian carrier to be controlled and owned by an Indian or an Indian entity. This will increase competition for Indian airlines, as deep-pocketed airlines from the Gulf will be able to set up shops in India through their group companies.

This will allow the likes of Etihad, Singapore Airlines and AirAsia to gain management control of Jet Airways, Vistara and AirAsia India through their group companies. Qatar Airways had earlier tried to use the Qatar Investment Authority, a sovereign wealth fund, to buy into Indian budget carrier IndiGo. Donald Trump Jersey

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