Loading

CAPA India: Foreign airline investment will bring much needed long-term capital and expertise

Analysis

The long-awaited decision by the Indian Cabinet on 14-Sep-2012 to approve foreign airline investment in Indian carriers finally brings to an end a regulatory anomaly that has existed for more than 15 years. India already permits 49% foreign direct investment (FDI) in the airline sector, but since 1996 the regulations - unique in the world - have specifically excluded the one class of investor that has the greatest strategic interest and can add value to the sector, namely foreign airlines.

In the 1990s when deregulation allowed the entry of private carriers on domestic routes, initially as air taxis and subsequently as scheduled airlines, India permitted up to 40% foreign direct investment, including by foreign airlines. Jet Airways at the time in fact maximised this provision, with both Gulf Air and Kuwait Airways each holding a 20% stake in the fledgling airline. This strategic investment undoubtedly provided Jet Airways with a number of benefits including access to expertise and international feed.

Read More

This CAPA Analysis Report is 1,151 words.

You must log in to read the rest of this article.

Got an account? Log In

Create a CAPA Account

Get a taste of our expert analysis and research publications by signing up to CAPA Content Lite for free, or unlock full access with CAPA Membership.

InclusionsContent Lite UserCAPA Member
News
Non-Premium Analysis
Premium Analysis
Data Centre
Selected Research Publications

Want More Analysis Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More