Qatar Airways to launch India's first fully foreign-owned airline

09 Mar 2017 | By NewsBytes Desk
Qatar Airways coming to India

Sources have confirmed that Qatar Airways seeks to launch India's first fully foreign-owned domestic airline.

Qatar Airways CEO Akbar Al Baker made the announcement in Berlin. He said he would do so in partnership with the Qatar Investment Authority, the investment arm of the government of Qatar.

The announcement comes after the Indian government allowed 100% FDI in airlines.

In context: Qatar Airways coming to India

IntroductionQatar Airways: Overview

Established in 1993, Qatar Airways is the state-owned flag carrier of Qatar and is headquartered in Doha.

It caters to over 150 international destinations across the world, operating a fleet of over 180 aircraft.

Since 2013, it has been a fully owned entity of the Qatari government.

Qatar AirwaysQatar Airways has been looking for Indian foothold

In June 2015, Qatar Airways expressed interest in acquiring 49% of IndiGo.

However, owing to government regulations and lack of time, Qatar Airways was unable to invest in IndiGo's IPO.

Sources also said that Qatar Airways had shown considerable interest in investing in Kingfisher Airlines, before it was grounded in 2012.

They also attempted deals with GoAir and SpiceJet in 2012, which fell through.

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India allows 100% FDI in airlines

June'16India allows 100% FDI in airlines

In June 2016, the Indian government allowed up to 100% FDI in the aviation sector. However for foreign airlines, the cap remained at 49%.

The catch is that now, instead of foreign airlines having to partner with domestic Indian carriers for the remaining 51%, they can now get the same from sovereign wealth funds of other governments, based on approval by the Indian government.

Foreign airlines in India

Etihad has 24% stake in Jet Airways. Singapore Airlines has 49% stake in Vistara, while AirAsia has 49% stake in AirAsia India. The remaining 51% in both these carriers is held by the Tata Group.

09 Mar 2017Qatar Airways to launch India's first fully foreign-owned airline

Substantial ownership and effective control (SOEC)

India is finalizing SOEC norms for foreign airlines to operate in India. Airlines get flying licenses in India only if its chairperson and two-third of the directors are Indians. The International Civil Aviation Organization requires these SOEC norms to allow Indian carriers to fly abroad.