There are speculations in the aviation industry that the government may take a policy decision on approving the foreign direct investment in the aviation sector, allowing foreign investors to take up to 49 percent stake in domestic carriers such as Air India, Spicejet, Kingfisher, Indigo and others. This move is being analyzed from two different perspectives. While some are welcoming the move and believe that it was the one which was long overdue, some others are skeptical about its real utility.
In India the civil aviation has not been profitable for most of the carriers and therefore, after opening of the skies for the private players, there many been quite a few instances where the private airlines have bundled up in a short span of time. At present, the total accumulated losses registered by the airlines are approximately Rs 70000 crores. Given the present state of affairs of the carriers, most of which are not doing well on the financial grounds, it is only a guess game whether anyone would be interested in taking up the stake through the FDI route. Very few airlines, namely Indigo Airlines or Spicejet have done well in the past few years. But, even there the scope of FDI investment is limited because the Indigo Airlines already has substantial foreign financing and Spicejet has limited operations as compared with other carriers. This limits the options of the foreign investors. The experts from this school of thought are of the opinion that the current state of mess is the result of extravagant policy measures of the airlines and their poor management.
One school of thought opposed to the government proposal points out certain other areas where the government has failed to take effective steps. These relate to the high rates of taxation levied by the government and the permission for flights. Some expert believe that our own house shall be set in order at first before inviting the foreign investments since this might be helpful for the airlines to improve their profitability. The cheap air tickets might still be provided by the airlines since it makes them tap the latent demand of aviation in the new markets which is crucial for their growth. So, it is the cut in the aviation rates which is likely to provide relief to the airlines.
The other perspective, in favor of the FDI, is that this will make the airlines more responsible and efficient in operations. Whether the cheap air tickets would continue or would become a thing of past will squarely depend only on the financial health of the airlines. Further, there is a lot of scope for the growth of civil aviation in India since it is a big country with a fast growing economy. The business and corporate travel is expected to increase as well. This will increase the demand for more domestic as well as international flights. Thus, it is the good future prospects, rather than the current sorry state of affairs, which might form the basis of good FDI investment.
More interesting articlesMake Your Trip to the Himalayas Comfortable with Online Hotel Booking
Hindu Religious Centers and Growth Of Hotels in India
Top Summer Destinations in South India in 2013
Fairs and Festivals of Andhra Pradesh
Most Revered Religious Places In India are also the Richest
Rejoicing The Modern Comforts At The Westin, Gurgaon
Pondicherry Hotels Carry Strong French Influences
Top Posts & Pages
Click Tags to Find Related PostsAir Arabia airline Airfare Air Fare airlines Airline tickets Air Ticket booking Air Ticket International air Tickets Air tickets International book airline tickets book air tickets Book Flights book flight tickets Cheap airline tickets cheap air tickets Cheap Domestic air Tickets Cheapest air fare Cheapest Air Tickets cheap flights Cheap Flight Tickets cheap international air tickets cheap international flights cheap international flight tickets Cheap tickets Domestic airline tickets Domestic flight booking Domestic Flights flight and hotel booking Flight Booking flight fare flight plus hotel booking in India Flights flight schedule Flight status Flight ticket booking Flight Tickets Go Air Booking Go Air Flight Go Air flight booking Go Air Flight Fares Go Air Flight Status Go Air Ticket Booking go indigo Hyderabad to Dubai Flights indigo indigo airlines Indigo Flight Booking Indigo Flight Status Indigo Online Booking international airfare international airfares international air flights International Airlines International Airline Tickets International Air Tickets International Flight booking international flights international flight schedules international travel Jet Airways Jet Airways booking Jet Airways domestic flights lowest airfare Lowest Air fare lowest international airfare Lufthansa flight Mumbai to Sydney Flights Online air Ticket booking Online Flight Booking spicejet Spicejet Booking Spicejet Flight Booking Spicejet Flight Fares Spicejet Online Booking SpiceJet Ticket Booking
- Qatar Airways Airline Initiates Instagram Contest
- Competitive International Airfare Providers Kuwait Airways Confident About Fleet Overhaul Despite Probe
- New Terminal at Chhatrapati Shivaji International Airport for Easier Air Travel
- Make a Gulf Air Airlines Booking to Fly to Tehran
- Book a Lufthansa Flight to Enjoy the Services on its New Aircraft from February
Plan Your Travel