Review foreign carriers investment in India: Plan panel

By agencies   |   Thursday, 23 June 2005, 07:00 Hrs
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NEW DELHI: The Planning Commission has suggested review of a policy that debars foreign carriers from investing in domestic ones, saying airline operations required expertise as much as capital.

"There is a case for reviewing this policy as operation of airlines requires expertise as much as it does capital," the Mid-Term Appraisal (MTA) of the Tenth Plan has said.

Noting that foreign direct investment in airlines had been raised to 49 percent, the MTA document pointed out that foreign airlines "are still debarred from equity participation in domestic air transport operations".

On privatization of Air-India and Indian Airlines, it said: "A fresh exercise for restructuring" the two public sector carriers to make them competitive could be considered.

It pointed out that the process of dis-investment, which was undertaken "to improve the operational efficiency and financial performance" of the two public sector carriers, could not be completed as the qualified bidders withdrew due to several factors.

The dis-investment process could also not be resumed due to the unfavorable circumstances prevailing in the global aviation industry at that time, the MTA said.

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