India allowed 49% FDI in Air India as it looks to sell part of its stake in the debt-ridden state-run carrier that’s staying afloat on a Government bailout. Asia’s second-largest economy allows foreign airlines to hold up to 49% stake in Indian carriers with the exception of Air India. That restriction has now been lifted by the cabinet, according to a Government press statement. A substantial ownership and effective control of Air India will remain with Indian nationals, it said.
Air India had a total debt of about INR 48,877 crore at the end of March 2017. The Government has infused INR 26,545 crore into the airline in five years. A group of ministers tasked with finding ways to explore state-run Air India’s divestment has decided to create a separate entity to pool in working capital loans and non-core assets of the national carrier.
The airline is projected to increase operating profit to INR 531 crore from INR 215 crore in the previous year, as per latest numbers tabled in Parliament.
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