Aviation shares take off on FDI buzz

Three aviation shares rose by 3.85% to 8.08% at 12:14 IST on BSE on reports the Union Cabinet will today, 14 September 2012, consider a proposal to allow foreign airlines to buy stakes in local carriers. Kingfisher Airlines (up 8.08%), SpiceJet (up 6.51%) and Jet Airways India (up 3.85%), edged higher. The BSE Sensex was up 377.77 points, or 2.10%, at 18,398.93. On Monday (10 September 2012), civil aviation minister Ajit Singh was quoted by media as saying that he hoped that a political consensus would emerge on allowing foreign airlines to buy into Indian carriers. Allowing foreign carriers to invest in domestic carriers will bring much-needed cash for the ailing domestic aviation sector that has been badly hit by high jet fuel price and a weak rupee. At present, India allows foreign investors, not related in any way to airline business, to buy up to 49% stake in domestic airlines, but foreign carriers are not permitted to invest in them. Accepting a major demand of the cash-strapped aviation industry, the government had in January 2012 launched the process to allow foreign airlines picking up to 49% stake in Indian carriers.