Airline industry to post collective losses of Rs 10,000 crore, Singh

Airline industry to post collective losses of Rs 10,000 crore, SinghIndia Aviation Minister Ajit Singh has said that the aviation firms in the country are likely to post losses to the tune of Rs 10,000 crore collectively in the financial year 2012.

He also pointed out that the troubled, Kingfisher Airlines has not been able to pay dues including landing and parking fee to the Airports Authority of India (AAI). He said that the Department of Industrial Policy and Promotion (DIPP) is considering allowing foreign direct investment (FDI) in the aviation sector by foreign aviation firms.

The proposal to allow foreign aviation companies to start investing in India's airlines will come as a relief to the cash-strapped firms in the country like Kingfisher and others. The ministries of Finance and Civil Aviation are already backing the proposal amend the FDI guidelines for the aviation sector and there are some ministries that are yet to announce give their approval. The government is considering allowing them to buy stakes in Indian carriers.

The government's policy on foreign investment in aviation is restrictive at present. It allows foreign investment of up to 49 percent in Indian carriers but, the foreign airlines are not permitted to invest directly or indirectly in domestic carriers.

According to reports, Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee, Commerce Minister Anand Sharma and Aviation Minister Ajit Singh are backing the proposal to allow FDI but are facing opposition from Mamata Banerjee.