Centre clips FDI wings in airlines

New Delhi: After allowing FDI by foreign airlines in the Indian carriers, the government on Friday amended civil aviation regulations (CARs) to make sure that foreign airlines or foreign investors do not gain control over Indian carriers.

For instance, the government has now made it clear that “a domestic scheduled passenger airline shall not enter into an agreement with a foreign investing institution or a foreign airline, which may give such foreign investing institution or foreign airlines or others on behalf of them, the right to control the management of the domestic operator”.

The government has also stipulated that foreign airlines which seek to hold equity in Indian domestic carriers should not have more than one-third representation on the board of directors of the (Indian) company.

It has also stipulated that positions of the chief executive officer, chief financial officer or chief operating officer, if held by foreign nationals, would require to be security-vetted by the home ministry.

“All foreign nationals are likely to be associated as a result of investment by foreign airlines will be cleared from security point of view before deployment,” the DGCA has stated, in the revision to the rules for “minimum requirements for grant of permit to operate scheduled passenger air transport services”.