Qatar Airways is interested in launching an airline in India, but the Foreign Direct Investment (FDI) policy for the aviation sector in the country is an impediment for the global carrier, the airline’s Group CEO Akbar Al Baker said on Tuesday.
The FDI policy allows a foreign entity to own 100% stake in an Indian airline, but a foreign airline can own only up to 49%. The Qatar-based carrier had announced it was interested in setting up an airline in India, last year in March.
“We are told as an airline you can only own 49%. But Qatar Investment Authority (QIA) can own 100%. However, QIA is the owner of Qatar Airways. So, then again, it becomes a chicken and egg story. So, we really don’t know what is allowed and what is not,” Mr. Baker said at a media round table at the International Aviation Summit. He said while Qatar Airways intended to own 49% in a domestic carrier based in India, the rest could be owned by QIA. But, regulatory authorities were opposed to the arrangement.
“They [Indian regulatory agency] said no. Once an airline is involved, you can’t. But what is the difference?” he asked. He called the Indian FDI norms “confusing” and said that the rationale behind distinguishing investment from a foreign player and an airline defied logic.
“As a foreigner, I could today own 100% in Indian carrier and tomorrow I may go and invest somewhere else also in foreign airline. Then, I become an owner of a foreign carrier. So what happens to my investment here?” he wondered.
He added that Qatar Airways would not wait indefinitely for clarity on the legalese of FDI norms. When asked if the window for that was 12 months, he said, “I hope.” The airline could also look at partnering with an Indian carrier, but only with a strong player like IndiGo. “Only IndiGo. Simply because it is an efficiently run airline, it is a profitable airline. And when we want to invest, we want to invest in a success story.”
If efforts to either set up a carrier in India or partner with an Indian airline did not fructify, then it would just have to abandon investing in India, he said.
‘AI stake’
On whether the airline would be interested in picking up stakes in Air India, the CEO said that Qatar Airways could look at acquiring the Indian carrier along with a strong partner, but without the baggage. While the huge debt of Air India was not an issue and could be restructured, the Qatar-based carrier would not be interested in acquiring the round handling, catering and engineering arms of the national carrier, he said.