Aviation: Qatar Airways puts on hold plans to set up airline in India
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From competitive foreign airlines to infrastructure constraints: Troubles of Indian domestic carriersQatar Airways will wait for "another 12 months" to decide on setting up an airline in India as it seeks clarity on "ambiguous" foreign ownership norms, said its Group Chief Executive Officer Akbar Al Baker today. Speaking at a select media round table in New Delhi, he said, "What we are given to understand is that a foreign airline cannot own 100 per cent but a foreigner can. I don't know what is the difference between a foreigner and an airline."
His comments come less than three months after Al Baker said that the Gulf carrier would soon be moving an application to launch a full-service airline in India for domestic operations. The QIA owns Qatar Airways.
Al Baker, who has been Qatar Airways' Group CEO for over two decades, said the rule of allowing foreign entity to own up to 100 per cent stake in Indian carriers is not very clear. He became Qatar Airways Group Chief Executive in 1997.
He said if Qatar Investment Authority (QIA) owns 51 per cent and Qatar Airways has 49 per cent in an airline that is not allowed, adding "It is very ambiguous. Really the rule is not clear."
On how long Qatar Airways can wait on India venture, Al Baker said, "We will wait for another 12 months but beyond that we will not be able to..." "There is always an opportunity to invest in airlines in India. India is a huge aviation market," he said, adding "We will lose interest in time because you know we have a fund we would like to invest. If we don't invest in time, then we would have to invest somewhere else."
Earlier in March 2017, Al Baker first mentioned about its plans for a carrier in India. In February this year, he had said it plans to launch an airline in India with at least 100 planes. The airline is open for partnership provided it gets a good local partner who is credible and financially sound, he added.
The PTI report quoted him as saying it does not matter whether it would be a majority or minority stake, and added "As long as it is a robust entity we don't have any problems to work with them."
Making clear Qatar Airways' strategy, Al Baker reportedly said that it does not want to go and invest in an airline just because they need funds. "We need to invest in an airline that will give us return on investment, efficiently run and that has growth potential," he said.
Noting that Qatar Airways does not want to take 2-3 per cent, Al Baker said that it would look for substantial stake of "say 10 to 15 per cent".
To a query on whether Qatar Airways is in talks with any airline in India, Baker replied in the negative. Qatar Airways had shown interest to IndiGo many times but they were not ready apart from the initial public offer.
"India is such an important market. India is a sleeping economic giant. There is potential here that is not available in many other countries," Al Baker reportedly said even as he mentioned that double-digit growth does not mean that airlines are going to make money.
India has permitted foreign investors, barring foreign airlines, from owning up to 100 per cent stake in local carriers. While a foreign airline can hold up to 49 per cent stake, foreign investment arms can own the remaining.
The country's domestic aviation sector has been registering double-digit growth for more than three years. The government had proposed strategic disinvestment of debt-laden Air India but the plan failed to take off.
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Last December, Qatar Airways had reportedly said that it would like to add more flights to India in the future as the country is an economic superpower and an important destination for it.
