Shares of Kingfisher Airlines and Jet Airways have both risen on the news that the Department of Industrial Policy and Promotion (DIPP) has writing to the aviation ministry requesting foreign airlines be allowed to own stakes in domestic airlines. Kingfisher shares rose 4% on the news as it is eager to find investment where it can to help alleviate the Rs 6,000 crore debt burden. Jet Airways and SpiceJet shares rose 3% on the news. In the letter DIPP Secretary RP Singh states that due to the high risk of investing in airlines, private equity firms are deterred from investment but foreign airline companies would be willing to pick up stake as they are better equipped to understand the sector. They will be willing to derive synergy because of these alliances.
Shares in Indian airlines rise on the move to allow foreign investment
