Indian airline shares soar on FDI hopes

implement a turnaround plan.
The commerce ministry circulated a note seeking comments from other ministries and a decision could be approved at a cabinet meeting later today, a top government official said, asking not to be named. “It is correct — a decision could come this week,” the official said.
Shares of Kingfisher Airlines soared nearly nine percent to 20,30 rupees on the Bombay Stock Exchange, bucking a weaker overall market. Jet Airways climbed 6,34 percent while SpiceJet gained 6 percent.
Foreign airlines are barred from holding stakes in Indian airlines though other foreign investors can hold up to 49 percent.
The aviation and finance ministries have already agreed to let the foreign carriers in, pending cabinet approval. Kingfisher’s desperate financial condition has discouraged domestic investors from putting funds into the sector.
Mallya has told creditor banks the airline is in the final stages of negotiations with investors and will get funds to reduce its debts as soon as the government eases the aviation foreign direct investment (FDI) rules.
Analysts have mentioned IAG, parent company of British Airways, and Etihad Airways, flagship carrier of the United Arab Emirates, as companies that might be interested in taking a stake in Kingfisher.
Kingfisher, which is at least US$1,3 billion in debt and has never made a profit since its creation in 2005, needs US$400 million in immediate funds to stay in business, according to the Centre for Asia Pacific Aviation, a consultancy. — AFP.