The buzz in the Indian civil aviation market is not just about national carrier Air India's stake sale. The fast-growing civil aviation sector, especially the domestic segment, is attracting many foreign airlines, according to a former Air India executive.
"It is only a validation of what has been stated many times earlier India is a very strong market and all foreign airlines want to have a pie of the Indian market," Jitendra Bhargava, former Executive Director of Air India, told business news channel ET Now.
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His observation comes in the wake of reports that global PE players and airlines are eyeing a stake in Jet Airways, an Indian carrier in which Abu Dhabi-based Etihad Airways has 24 percent stake bought in April 2013 for about $380 million.
Delta Airlines, KLM and Air France are among the carriers that have reportedly evinced interest in Naresh Goyal-owned Jet Airways, while PE firms that want to have a pie include Blackstone Group, KKR and TPG Capital, the Moneycontrol said, citing its own sources and another media report.
The carriers can hold up to 49 percent under the existing FDI norms for the civil aviation sector, though non-aviation foreign investors can hold up to 100 percent. Therefore, carriers can buy a maximum stake of 25 percent in Jet Airways.
The new FDI norms announced in June last year have not seen any foreign carrier or investor buying stake in Indian civil aviation companies, though there have been reports off and on. For instance, there was a speculation that Qatar Airways could enter India to take advantage of the fast-growing market.
India's domestic civil aviation space is dominated by budget carrier IndiGo, the largest in terms of market share, followed by Jet Airways, Air India and SpiceJet. There are two joint ventures with the Tatas — AirAsia India and Vistara, the latter with Singapore Airlines.
