Advantage’s of FDI
Kingfisher will have a big advantage since it is little less
than the position grounded. After investments, Kingfisher will be on better
edge and start working smoothly and shall clear employee’s payment.
Kingfisher is already in talks with gulf and other airlines
to get investments. Kingfisher is the first airliner in Asia to order 20 of
Airbus-380 and Airbus-350. Jet airways have also ordered Boeing Dream liner’s
which will be delivered by 2016. Kingfisher is canceling their orders with manufacturer
to pay their fuel bills and taxes.
Many of Indian
airliners are already speaking to gulf airliners like Qatar and Royal Jet to Invest in Air Deccan. They
are just waiting for final flag down from government to jump in.
Foreign Investors are very interested to invest on Indian Air because
the Indian Air routes will be busiest and hot spot destination by 2020.
FDI
|
|||||
Year
|
Passengers
|
Cargo
|
Airlines
|
Airports
|
Profit
|
2011
|
2.5 billion
|
45 million tons
|
920
|
4,200
|
$ 350 million
|
2012
|
3.2 billion
|
49 million tons
|
920
|
4200
|
$ 400 million
|
Disadvantage’s of FDI
After Indian government finally calls the FDI into Indian Aviation the
scenario will force India to make huge changes in Infrastructure and
development which is not a good sign for Indian economy.
The changes like different Taxation policy and India may need to allow
more of foreign players to work and fly to India. In this process it may create artificial
imbalance in the market. Indian government may provide subsidies to Investors
to Gain profits.
Indian airliners are not performing well in the market , they are at
loss from past few years. Kingfisher is in steep loss of 2.328Cr, Spice jet stood
at 13.500Cr loss. Air fares may cost more as fuel and other services will be increased.
To avoid this Indian Government may bare the excess prices to avoid Borden on
the economy.
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