Date:14/01/2009 URL: http://www.thehindu.com/2009/01/14/stories/2009011456471500.htm

Business

FDI in airlines may be allowed

Special Correspondent

Foolproof security at airports planned
5 % drop in passengers carried in 2008

NEW DELHI: The Central Government may allow foreign airlines to pick up a minority stake in domestic airlines in a bid to shore up the civil aviation sector which is reeling under the impact of global economic slowdown and low volume of passengers.

Talking to reporters here on Monday, Union Civil Aviation Minister Praful Patel said that Union Cabinet would decide on the policy of allowing foreign direct investment (FDI) in the sector. “There is no clarity on the issue. This is one of the proposals which can be considered,” he said. At present, foreign airlines are debarred from holding a direct or indirect stake in domestic carriers. Key officials in the Civil Aviation Ministry said the government might allow foreign airlines to pick up “20-25 per cent” stake in domestic carriers to help them tide over the current crisis in the sector.

Security

In the wake of 26/11 terror attacks in Mumbai, the Bureau of Civil Aviation Security (BCAS) has drawn up plans to further increase and strengthen security at airports and other key areas of the sector. Mr. Patel said that the Union Home Ministry and BCAS were in favour of providing foolproof security at airports and using ‘innovative’ methods to upgrade it. “The entire gamut of civil aviation security is being discussed and reviewed. We are all for it though several processes are not very user-friendly,” the Minister added.

Meanwhile, the domestic airline industry has reported about five per cent decline in the number of passengers carried during 2008 calendar year. This is in sharp contrast to the 32.5 per cent growth witnessed by the industry in 2007 and 46.5 per cent growth recorded in the previous year.

Official data show that the total passengers flown by the domestic carriers in 2008 were 407.73 lakh with the private airline Jet Airways flying 87.62 lakh passengers and Air India 66.36 lakh passengers followed by Kingfisher at 62.80 lakh and Deccan 49.78 lakh. IndiGo carried 47.46 lakh passengers, SpiceJet 40.69 lakh and Paramount 6.30 lakh.