Bar on foreign airlines' equity participation to stay

By agencies   |   Friday, 12 August 2005, 19:30 IST
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NEW DELHI: The Government is "at present" not in favor of direct or indirect equity participation by foreign airlines in domestic airlines, the Minister of Civil Aviation, Praful Patel, told Parliament today. He also said that Persons of Indian Origin (PIO) who are not Indian citizens could not be permitted to operate air transport services in the present regulatory framework. Quoting the Planning Commission's mid-term review of the Tenth Five Year Plan, Patel pointed out that the Commission, while commenting on the civil aviation sector, has said that foreign airlines were still debarred from equity participation in domestic air transport operations and that there was a case for reviewing the policy because operation of airlines required expertise as well as capital. However, the Government was at present not in favor of direct or indirect equity participation by foreign airlines in domestic airlines, Patel added. Replying to questions in the Lok Sabha, the Minister said that the existing civil aviation requirements stipulate that a scheduled or non-scheduled air transport operators permit could only be granted to Indian citizens or to a company/body corporate, provided substantial ownership and effective control vests in Indian nationals. "Hence, Persons of Indian Origin (PIO), who are not Indian citizens, cannot be permitted to operate air transport services in terms of the present regulatory position," Patel said. The position of the Government could lead to a delay in the launch of a new airline, Magic Air. Nira Radia, a PIO, who has filed an application for starting the airline, is promoting the new venture. The Minister also said that the Government's share in Airports Authority of India (AAI) is not being divested.

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