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Foreign airlines not allowed to control Indian carriers

Publication Date : 16-04-2014

 

In a move that may affect the Jet-Etihad deal or start-up carriers like Tata-SIA or AirAsia India, the Director General of India's Civil Aviation made it clear that foreign airlines or investors would not have the right to control the management of an Indian carrier.

Following apprehensions expressed on these lines by various quarters, the aviation regulator has given effect to amendments in a rule on the granting of flying permits to new airlines in the country, official sources said here.

The DGCA has stipulated that a scheduled Indian airline cannot enter into an agreement with a foreign investing institution or a foreign airline which could give these foreign entities the right to control the management of the domestic operator.

It has also made it clear that such foreign entities could have representation on the board of directors of the Indian airline company, but not more than one-third of the total number, the sources said.

Analysts feel that the latest revision to the Civil Aviation Requirement (CAR) could affect the fortunes of Etihad which is acquiring a 24-per cent stake in Jet Airways, apart from start-up firms AirAsia India and Tata-Singapore Airlines.

These airlines are at various stages of getting final permission from the government to launch new operations.


 

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