In a bid to safeguard the interests of ailing aviation sector, a Group of Ministers will meet on Thursday to give final touches on allowing investments in Indian carriers by foreign airlines, direct import of jet fuel by Indian carriers and Air India’s financial restructuring plan.

The meeting may also decide on the investment cap by foreign airlines in buying equity in Indian carriers, official sources said.

The GoM is also likely to take a decision on allowing Indian airlines directly import aviation turbine fuel to get some breather from the high sales tax regime imposed by state governments.

During the meeting, cash-strapped Air India’s financial restructuring plan and turnaround plan would come up for a review and a decision on injecting additional equity into the national carrier is likely to be taken.

The debt-ridden carrier has outstanding loans and dues worth Rs 67,520 crore, of which Rs 21,200 crore is working capital loan, Rs 22,000 crore is long-term loan on fleet acquisition, Rs 4,600 crore is vendor dues besides an accumulated loss of Rs 20,320 crore, according to official figures.

The Civil Aviation Minister, Mr Ajit Singh, after his meeting with the Finance Minister, Mr Pranab Mukherjee, on January 17, had said that he had discussed the issue with him and that he had expressed his agreement to it. His ministry is to prepare a note for the Cabinet.

Mr Singh had said FDI was one of the factors which would help the industry to survive the current financial crisis.

“We all know that the aviation industry is under a lot of stress. Allowing foreign airlines to pick up stake in Indian carriers would mark a major policy shift,” he had said.

Earlier, foreign airlines were not allowed to invest in Indian airlines though foreign direct investment of up to 49 per cent was allowed. A Committee of Secretaries has proposed a 49 per cent cap on FDI by foreign airlines.

But earlier, the Civil Aviation Ministry had suggested 24 per cent, while the Department of Industrial Policy and Promotion (DIPP) had recommended 26 per cent.

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