Qatar Airways plans to start domestic airline in India

Posted on March 9, 2017

Qatar Airways CEO said on Wednesday (08/03/2017) that Qatar Airways and Qatar Investment Authority plan to start a domestic airline in India. If their plan is implemented then Qatar Airways will become India’s first fully – foreign owned local airlines. Prime Minister Narendra Modi had allowed upto 100% FDIs in local airlines from June last year (2016). Read more on FDIs

“We will soon be making an application to that effect and from there we will proceed. Yes we will have a 100% owned domestic carrier in India that will belong to both Qatar Airways and our state investment arm as India has now allowed foreign direct investment in domestic carriers within India”, Qatar Airways CEO, Akbar Al Baker said.

The CEO further added that Qatar Airways plans to have a fleet of upto hundred airlines in India. According to the new FDI policy, a foreign airline can have upto 49% stake in a domestic airline but other foreign airlines too can invest in the domestic airline and eventually the domestic airline can be fully owned by foreign airlines. Qatar’s CEO Al Baker has been consistently making efforts to buy stakes in Indian airliners. Last year, in the month of July, he publicly expressed his intentions to buy a stake in the country’s largest domestic airliner, IndiGo but the talks he had with IndiGo’s CEO had failed. Al Baker has also been actively advocating the concept of open skies or unrestricted flying rights between countries.

Currently, Qatar and India work on bilateral air service agreements under which both carriers from both countries can operate a stipulated, equal number of flights on either air route. The two main competitors of Qatar Airways are Dubai’s Emirates and Abu Dhabi’s Etihad Airways. Etihad Airways has a 24% stake in India’s private domestic airliner, Jet Airways. Together they fly the maximum number of passengers out of India, to other countries. On the other hand, Emirates has the greatest chunk of bilateral rights to India. India’s air travel market is booming currently and it is essential to Qatar Airways to capitalize on the booming Indian air travel market. It is the only way Qatar Airways can keep up (compete with) with its arch rivals Emirates and Etihad Airways respectively. However, doubts still remain on whether the Indian Government will allow a fully foreign – owned airline to operate domestically in India. The current aviation rules are that Substantial Ownership and Effective Control (SOEC) need to remain with an Indian airline. This rule has not been amended even after the Government of India allowed 100% FDI in the aviation sector. Hopefully, this rule will be amended soon and fully owned foreign airlines will be allowed to travel freely between India and other countries. Read more on Startup News