AFP, NEW DELHI: Foreign airlines will be able to buy up to 49 per cent of Air India under new rules approved by the government yesterday to boost the debt-laden flag carrier.

Once the country’s monopoly airline, Air India has slowly lost market share to new low-cost private players in one of the world’s fastest-growing airline markets.

The government said last June it was open to selling a stake in the state-owned airline, which has developed a reputation for delays, cancellations and poor service.

Yesterday the cabinet rubber-stamped plans to allow foreign airlines to invest up to 49 per cent in Air India, subject to government approval.

That was part of a series of moves to relax restrictions on foreign investment.