Qatar Airways, which had announced its plans to set up an airline in India along with the Gulf nation’s sovereign wealth fund over two months ago, has not yet approached the government with its proposal. However, the government is applying its “mind” on bringing the rules and regulations regarding ownership and control of an airline in conformity with the new FDI norms, according to Civil Aviation Minister Ashok Gajapathi Raju. “With regard to a particular airline (Qatar Airways) approaching the government, I don’t think anyone has approached yet,” Raju told PTI.
Qatar Airways Chief Executive Officer Akbar Al Baker had on March 8 said in Berlin that his airline was joining hands with the investment arm of Qatar Government to start a domestic airline in India with a 100 per cent investment. “We are doing this because the Indian government has opened up the foreign direct investment in (setting up) an airline in India,” he added.
Last June, India allowed foreign investors — barring overseas airlines — to own up to 100 per cent stake in local carriers by liberalising FDI regulations. Currently, foreign airlines are allowed to invest only up to 49 per cent in Indian carriers.
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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.
At the same time, the existing rule still mandates that substantial ownership and effective control (SOEC) of an airline must vest with Indian nationals. The chairman and two-thirds of the board must comprise Indians. “SOEC has to be looked into definitely. What should be the case, we have to come across. We are applying our mind. we need to have regulations which are meaningful and sustain growth in the sector,” Raju said.
Meanwhile, a senior Civil Aviation Ministry official said the government is working out modalities of aligning various rules and regulations in line with the FDI decision. “We are in that process. Presently, we are working out the modalities of aligning our rules and regulations in line with the FDI decision,” the official said.
Significantly, the Federation of Indian Airlines (FIA) — comprising Jet Airways, SpiceJet, IndiGo and GoAir — have been vociferous about their opposition to foreign entities owning an Indian carrier.