Will foreign airlines fly into India?

The move to allow foreign-owned airlines in India has opened up the country’s aviation market to multiple possibilities, but has also thrown up a new set of challenges.

In theory, the relaxation makes it possible for a low-cost airline giant like Ryanair to start an Indian subsidiary together with a foreign fund, a Qatar Airways to invest in an existing Indian carrier or a British Airways to expand commercial cooperation with GoAir.

With just 80 million Indians taking to the air for domestic travel, compared with 8 billion who use the Indian Railways every year, the opportunities for air transport are immense. India is the fastest growing aviation market in the world.

“The airlines industry which is in need for funding will find the new limit of 100% useful, which will also help to bring a turnaround in their operations as well as enable expansion plans,” Madan Sabnavis, chief economist, Credit Analysis & Research Ltd, said in a 21 June report.

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