Shares of three aviation companies, including Jet Airways, posted gains up to 13 per cent today after the government said it would consider allowing foreign airlines to take 49 per cent stake in Indian carriers.
Shares of Jet Airways India zoomed up 12.55 per cent to Rs 264.40 on the BSE, while SpiceJet soared 10 per cent to Rs 24.60. Vijay Mallya-led UB Group’s Kingfisher Airlines also touched an early high of Rs 27.70, up 10.35 per cent.
“I discussed it with the Finance Minister and he has agreed. We will bring out a note for the Cabinet now,” the Civil Aviation Minister, Mr Ajit Singh, said.
Allowing foreign airlines to pick up stake in Indian carriers would mark a major policy shift. Earlier foreign airlines were not allowed to invest in Indian airlines though foreign direct investment was allowed.
The domestic airlines are grappling with huge debts and high jet fuel prices, among other troubles due to the weakness in overall economy, and the overseas capital from foreign carriers could provide them with the much-needed cash for operations, experts opined.