Earlier the aviation ministry had proposed for 24% of foreign direct investment (FDI) by foreign carriers but later Senior government officials confirmed that the ministry has agreed to 26% of FDI by foreign airlines.
The Department of Industrial Policy and Promotion (DIPP) proposed for 26% of FDI looking at the current situation of the Airline Industry. All major airlines of India have posted massive losses in their quarterly results, due to rising fuel and input costs.
Kingfisher Airlines has been slipped into a debt crisis and has a total loan liability of more than Rs 7,000 crore and Indian banks have no plans for another round of debt restructuring for cash-strapped Kingfisher Airlines.
The step was very much vital for the survival and growth of the airline industry which is struggling to cope up with the losses.