Related News

Home » Business » Transport

India mulls lifting restrictions

Singapore Airlines Ltd, Virgin Atlantic Airways Ltd and other carriers may win the right to buy into Indian airlines as the world's second-fastest-growing major economy plans to scrap investment restrictions.

India's government is considering allowing overseas airlines to own stakes in local carriers, Civil Aviation Minister Praful Patel told reporters last week. That would reverse a more than a decade-old rule that banned them from owning shares of domestic carriers.

With global traffic plunging amid a recession, India's move may give foreign airlines a slice of a market that's set to surge ninefold in the two decades to 2026, according to Airbus SAS. The plan will also give carriers such as Jet Airways (India) Ltd and SpiceJet Ltd access to cash and expertise amid a record US$2-billion industrywide loss last year.

"In a global recession, foreign carriers will look at any opportunity where they can make a bit of money," said Viswanathan Vasudevan, who helps manage US$300 million at Aquarius Investment Advisors Pte in Singapore. "India seems to be one of the countries where you have some opportunity. That could be a big plus."

Vasudevan may purchase Indian airline shares if the government eases restrictions for foreign carriers.

Seven new airlines have been set up in the past six years and passenger numbers doubled between 2004 and 2007, the government said.

Fastest growing

India's domestic air traffic will grow 11.5 percent in the 20 years to 2026, making it the world's fastest-growing aviation market, according to France-based Airbus, the world's largest plane maker.

In comparison, China's domestic traffic will grow 8.4 percent and the United States, the world's largest aviation market, will grow 2.4 percent, according to Airbus.

Singapore Airlines, the world's largest by market value, is optimistic about the long-term future of aviation in the Asian region and "would like to see the regulatory barriers toward future investment opportunities cleared," spokesman Stephen Forshaw said in an e-mail, according to Bloomberg News.

The carrier has no immediate plans to consider an investment in an Indian airline, Forshaw added.

Singapore Airlines, which last year suffered a setback in its effort to purchase a stake in China Eastern Airlines Corp, in 2001 dropped a plan to bid for a stake in state-owned Air India with India's Tata Group.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend