FDI to breathe fresh air into Kingfisher? Sure, say experts

Moneycontrol Bureau

Kingfisher Airlines (KFA) would be the biggest beneficiary if 25% foreign direct investment (FDI) is allowed in Indian air carriers.

According to sources in the civil aviation ministry, Vijay Mallya, owner of KFA has been lobbying with the government to allow foreign airlines to invest in the Indian aviation space. Currently, 49% FDI is allowed in airport infrastructure related projects but a restriction on foreign investment in airline prevails.

Shares of KFA rallied over 4% yesterday following news of civil aviation minister Vayalar Ravi making a statement that his ministry is considering the recommendation of the Department of Industrial Policy & Promotion (DIPP) to allow foreign carriers to pick up stakes in domestic airlines.

Of all airlines, KFA is the only airline which has never posted profits since its inception making Mallya desperate to attain operational efficiencies.

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