India decided to allow foreign airlines to buy stakes of up to 49% in local carriers, a long-awaited policy move that could provide a lifeline to the country's debt-laden airlines by opening up a fresh source of funding.
The move, which comes with conditions, is a part of massive big-ticket reforms announced by India, including opening up its supermarket sector to foreign firms, as it seeks to revive economic growth and avoid a ratings downgrade.
Ailing Kingfisher Airlines, which was India's No. 2 local carrier a year ago but has since grounded most of its fleet, has lobbied hard for this move on hopes that it can attract a foreign airline investor, although none has publicly expressed interest.
Budget carrier SpiceJet, the fourth-largest of India's six main airlines, said it was in initial talks with several Gulf carriers and was waiting for the government to ease rules before it takes a final call.
With global airlines buffeted by the European debt crisis and high fuel costs, fast-growing Gulf carriers such as Dubai's Emirates, Qatar Airways and Abu Dhabi's Etihad are seen as the most likely buyers of stakes in Indian carriers, analysts say.
Source: Reuters