SpiceJet approached by Gulf-based, Southeast Asian Carriers

SpiceJet Ltd. | Airlines | Travel & Hospitality | BSE: 500285 | NSE: SPICEJET

19 Apr 2012 Evaluate

SpiceJet, which has been approached by several Gulf-based and Southeast Asian airlines, is not expected to jump their guns, ahead of the government’s consensus on foreign investment for aviation sector. However, decision on most awaited Foreign Direct Investment (FDI) in aviation is likely to be deferred again, which was originally expected to take place, later this week.

India allows up to 49 per cent foreign investment in Indian carriers but bars foreign carriers from picking up stakes. But with most carriers suffering losses, the government is now mulling allowing foreign airlines to invest directly. The move would allow cash-strapped domestic airlines like Kingfisher Airlines to access funds more easily. Indian airlines are laden with $20 billion in debt and probably lost $2.5 billion in the fiscal year that ended in March, according to Centre for Asia Pacific Aviation, a consultancy.

Meanwhile, Dubai's Emirates airline earlier this week was reported to be scorching new opportunities to buy foreign carriers if they fit the Gulf emirate's strategy, adding that the airline would be interested in making an investment in India if carried out at right price.

It was also reported that although Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee, Commerce Minister Anand Sharma and Aviation Minister Ajit Singh, are in favour of FDI, but Mamata Banerjee-led Trinamool Congress’ (TMC) opposition to the proposal, has triggered a cautious approach by the Government.