In a significant move to boost regional air connectivity, the Government on Tuesday relaxed norms allowing up to 49 per cent foreign direct investment through the automatic route in regional carriers.
Currently, foreign entities can own up to 49 per cent stake in domestic airlines, including regional ones, but need prior Government approval. Now, regional carriers are allowed to offload up to 49 per cent stake to overseas entities without seeking Foreign Investment Promotion Board (FIPB) nod.
There are at least three regional airlines -- Air Costa, Air Pegasus and True Jet -- operating on various routes and which between them have more than 460 flights every week.
Unveiling the relaxations in FDI norms for as many as 15 sectors, the Government in a release on Tuesday said, “Regional air transport service (RSOP) will also be eligible for foreign investment up to 49 per cent under the automatic route.”
Currently, FDI up to 49 per cent is allowed in scheduled air transport service or domestic scheduled passenger airline.
At least two of the three regional airlines are exploring opportunities to collaborate with foreign players, including a possible stake sale.