Decision on aviation FDI deferred for next cabinet meet

New Delhi, April 12 (IANS) A key decision on foreign carriers picking up stake in domestic airlines was deferred Thursday at a meeting of the cabinet presided over by Prime Minister Manmohan Singh.

"The matter has been deferred. It will come up in the next cabinet meet," Civil Aviation Minister Ajit Singh told reporters here.

Ajit Singh, who was among those present at the meeting, said foreign direct investment (FDI) by foreign carriers will have to go through the government's approval route if and when a decision is taken on the matter.

"The FDI has to abide by the rules which have been set where two-thirds of the board members should be Indian. The management has to be Indianised," Singh said.

Official sources said some ministers wanted more clarity on the issue.

Currently, the government allows FDI up to 49 percent in Indian carriers by non-airline players but bans foreign airlines from directly investing for security concerns.

But some industry insiders have been supporting the move which they say will help the bleeding sector where three listed players - Jet, Kingfisher and SpiceJet - have reported heavy third quarter losses.

Share prices of aviation companies rallied Wednesday, expecting a favourable decision.