Government is open to the idea of changing its present policy and allowing foreign airlines to pick stake in domestic carriers, but not rightaway.
"As of now, foreign airlines cannot pick up stake in domestic airlines. But government policies evolve with the changing scenario and this could happen when the government feels the necessity. At this stage, the present policy is sufficient to take care of the needs of the Indian airlines," Civil Aviation Minister Praful Patel said in New Delhi on Friday.
Foreign investment up to 49 per cent is now allowed in the aviation sector and in domestic carriers, though not by foreign airlines.
Official sources said this policy could be revisited once Indian carriers together acquired over 1,000 aircraft in another five years when they would acquire a critical financial strength. At that time, the participation of even foreign airlines could be looked into, they added.
To questions on the proposed merger of Air-India and Indian, Patel told reporters the government would soon take a decision on whether the national carriers would go in for Initial Public Offers separately or do it after merger.
"Our advisors are on the job ... working on various options. One suggestion is that may be a better value can be arrived at (on the IPO) after merger. We will take a decision on the basis of good advice", he said.
Asked about employees of the two national airlines in the aftermath of the merger, the minister said: "I do not foresee any HR problem. All the staff will remain as both the airlines are growing and acquiring more aircraft".
He said the aircraft-employee ratio, which was high now, would be cut down 'drastically' once the new fleet was inducted by Air-India and Indian. "We will definitely optimise manpower with the new aircraft coming in".
On the merger and acquisition guidelines, Patel said the Aircraft Acquisition Committee has sent its recommendations.
"We will go by them and I don't see any major obstacles in mergers and acquisition in the Indian aviation industry, which is growing by leaps and bounds."
To a question on the imposition of over 12 per cent service tax on first class and business class international travel, he said he would take up the matter with Finance Minister P Chidambaram. "We will express our viewpoints as well as those expressed by foreign airlines, the ICAO and IATA. We hope to find a solution".
Regarding the ageing fleet of Air-India and the recent instances of emergency landings, the minister said such landings were undertaken 'as precautionary measures' and as part of the laid down procedures.
"The fleet may be old but technically they are 100 per cent safe and sound", Patel said.
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