Raising hopes for troubled Indian airlines,
Civil Aviation Minister Ajit Singh on Wednesday said a Group of Ministers (GoM) will meet soon to discuss details of
foreign direct investment (FDI) in the aviation sector.
"Finally, the
Cabinet will take the decision. The Committee of Secretaries has already
recommended raising the FDI limits in the sector," Singh told reporters in the national capital, after laying the foundation stone for a third ATC tower at the Indira Gandhi International Airport.
The finance ministry had in December 2011 given its approval to the proposal of the Department of Industrial Policy and Promotion (DIPP) for allowing 26 per cent FDI by foreign airlines in domestic carriers.
However, the consent came with the rider that such investments should not violate market regulator Securities and Exchange Board of India's takeover code.
Singh's comments will bring some respite to
cash-strapped Kingfisher Airlines and Air India, which are already bleeding and engulfed in loan-repayment and tax troubles.
The minister also ruled out reports of the government
bailing out the Vijay Mallya-owned airline, saying the government is not in the favour of helping out a private entity.
"Air India is government's responsibility because it is a government organisation," he said in response to a question on the reasons behind the Centre backing Air India's revival.
Singh said private airlines should come out with workable business plans and then seek loans from banks. He also clarified that the government talking to banks on extending loan-repayment tenures for troubled airlines would mean they are are being supported by it, which is not the case.
Meanwhile. stocks of Jet Airways, SpiceJet and Kingfisher Airlines surged over 5 per cent each in afternoon trade on Wednesday as news of government talks on FDI in aviation came in.
Shares of Jet Airways surged over 8 per cent to touch their day's high of Rs 208.95. At 12.50 pm, shares of the company were trading 8.3 per cent higher at Rs 206.80.
Shares of SpiceJet surged over 7 per cent to Rs 19.65. The stock has hit a high of Rs 19.90 and a low of Rs 18.70 so far in trade.
Cash-strapped Kingfisher Airlines gained over 5 per cent to Rs 22.20. The stock has hit a high of Rs 22.55 and a low of Rs 21.50 so far in trade.
- With agency inputs
Special 
