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Qatar Airways still keen on India unit and IndiGo stake

Qatar Airways remains interested in establishing an airline in India, and remains open to taking a stake in IndiGo.

In a television interview with CNBC-TV18 on 4 September, group chief executive Akbar Al Baker signalled that the airline will take further steps to set up its own India-based carrier only when the foreign direct investment cap is relaxed.

At present, India allows 100% ownership of its domestic carriers by foreign parties, but foreign airlines are limited to a 49% ownership.

“This is what our lawyers are telling us. Their approach has been stifled by [the authorities] saying that ‘no, an airline cannot own 100%, nor anybody can own 100%. It has to be 49% and it has to be done through an investment authority,’” he explains.

Qatar Airways has previously indicated that the carrier would be 49% owned by the airline, with the remainder held by a Qatar Investment Authority. While it would be "run by an Indian board; the chairman will be Indian", Al Baker adds that it will not proceed if it is forced to team up with a local partner.

The proposed carrier would be a full-service carrier targetting the fast-growing middle class in the country.

Despite that focus, Al Baker says that it is still interested in taking a stake in low-cost carrier IndiGo.

“The airline is efficiently run, it is the largest domestic airline in India. Other than [them], I’m really not interested,”he adds.

In 2015, Qatar said that it was in talks with IndiGo over a potential stake sale, although the Indian carrier said that it was only in preliminary discussions on "potential marketing arrangements".

Al Baker indicated that his door is open to a potential approach from IndiGo's major shareholders if they were seeking an exit option.

“The majority shareholders of IndiGo may one day decide that they want to allow a foreign carrier to invest in it, and once they approach us, yes we will be interested,” says Al Baker, adding that the offer would need to be for a "substantial stake; I don't want to be offered 2% or 3%."

He also laments that Qatar has not been provided additional traffic rights to India, despite more Indian carriers using the capacity available under the bilateral.

"Unfortunately, it seems we are not liked by the [civil aviation] ministry. First, we were told because there is no 80% utilisation of the Indian carriers on the Qatar-India biltarerals. Now it is [at] 84%, [and] still we are not getting any traction. I think it is very unfair, especially when Qatar is a very close friend of India... This relationship should be two-way. The least we can get is additional traffic rights."

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