Qatar Airways’ India airline plan may face opposition from airlines lobby FIA. Here’s why!

By: | Published: March 10, 2017 2:11 PM

Qatar Airways' India airline plan may face opposition from airlines lobby Federation Of Indian Airlines (FIA) as it is against 100% FDI in aviation, sources said.

Qatar Airways, which is among the top three Gulf carriers, has been exploring investment opportunities in the fast-growing Indian aviation market.

Qatar Airways’ India airline plan may face opposition from airlines lobby Federation Of Indian Airlines (FIA) as it is against 100% FDI in aviation, sources told BTVi. “FIA Indian airlines are not allowed to invest in foreign airlines. IndiGo President Aditya Ghosh and SpiceJet owner Ajay Singh will be meeting the aviation secretary today and 100% FDI in Aviation will be on the agenda,” the sources added. FIA includes Jet Airways, GoAir, Indigo, SpiceJet. Meanwhile, MOS Aviation Jayant Sinha told CNBC TV18 that though Qatar Airways has proposed to start an airline in India, it has not intimated any timeline on investing in India.

Qatar Airways, which is among the top three Gulf carriers, has been exploring investment opportunities in the fast-growing Indian aviation market. This will be the first of its kind airline venture in India that would be fully-owned by overseas entities and the proposal comes nearly nine months after the Indian government allowed 100 per cent foreign direct investment in the airlines’ segment.

“We are joining hands with the investment arm of State of Qatar to start a domestic airline in India with a 100 percent investment,” Chief Executive Al Baker said. “We are doing this because the Indian government has opened up the foreign direct investment in (setting up) an airline in India,” he added. While announcing the plan, Al Baker said it is yet to apply to the Indian government.

 

Last June, India allowed foreign investors — barring overseas airlines — to own up to 100 percent stake in local carriers by liberalizing FDI regulations. Currently, foreign airlines are allowed to invest only up to 49 per cent in Indian carriers.

However, the revised norms provide room for overseas airlines to partner with a foreign non-airline player to set up a 100 per cent foreign-owned carrier in India. While the FDI norms have been relaxed, the government is yet to amend the regulations with respect to Air Operator Permit (AOP)

At present, AOP is granted only to an airline where substantial ownership is with Indian entities. On several occasions earlier, Qatar Airways — which operates a significant number of flights from India to Qatar’s capital city Doha — had explored the possibility of buying stake in Indian budget carrier IndiGo.

(With inputs from PTI)

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