Putting on hold for another 12 months its plans to start an airline in India, the Qatar Airways has said that it wants clarity on the FDI norms as it feels that it is “ambiguous”.
Qatar Airways CEO Akbar Al Baker said the airline management is not yet fully comprehend the government policy about foreign airlines that are allowed to invest only up to 49% stake in a domestic airline.
“What we are given to understand is that a foreign airline cannot own 100% but a foreigner can. I don’t know what is the difference between a foreigner and an airline…It is very ambiguous.Really the rule is not clear,” Al Baker said on Tuesday.
His comments came months after the airline said that it would soon apply to launch a full-service domestic airline. As per Indian policy, foreign investors, barring airlines, are allowed to own up to 100% stake in local carriers. A foreign carrier can hold up to 49% stake in a domestic airline.
Al Baker said it was not clear whether QIA, the investment arm which owns Qatar Airways, can invest 51% while the airline itself can invest the remaining as per the existing rules.
“We will wait for another 12 months but beyond that we will not be able to…We will lose interest in time because you know we have a fund we would like to invest. If we don’t invest in time, then we would have to invest somewhere else,” he said.
He also said the airline is open for partnership if it gets a credible and financially sound local partner. He said Qatar Airlines is not specifically bogged down by the question of having majority stake in a local airline and its main concern is whether the potential partner is a “robust entity”.
While investing, he said they are not looking for a small investment but where it could get at least 10-15% stake. “India is such an important market. India is a sleeping economic giant. There is potential here that is not available in many other countries,” he said. DH
