Qatar Airways is Planning to Start an Airline in India

Per Bloomberg Quint, at ITB in Berlin, Germany, CEO of Qatar Airways’ Mr. Akbar Al Baker disclosed that they plan to start an airline in India with 100 planes initially. Qatar Airways has tried several time to obtain a stake in Indigo Airlines but hasn’t been successful.

Since India’s FDI norms do not allow more than 49% stake of a foreign airline in an Indian airline, Qatar Airways is planning to team up with Qatar’s sovereign fund, Qatar Investment Authority (QIA) to own the other 51% of the planned airline. What remains to be seen is whether Indian government will actually consider them to be two different investors when QIA even owns Qatar Airways (indirectly though).

This is a good strategy by Qatar Airways to develop its own feeder network by starting an airline in India which has been the largest growing domestic aviation market for 22 months straight. However, another potential issue in this plan is whether this new airline will be allowed to fly internationally. India’s aviation norms  has specific conditions on ‘substantial ownership and effective control (SOEC)’ needing an airline’s chairman and two-thirds of directors to be Indian for the airline to be allowed to fly internationally. India also recently did away with its 5/20 rule (wherein an airline needed 5 years of experience and at least 20 air planes before they could fly international routes). However, it has not been easy for the new airlines in India – Vistara and Air Asia India to obtain permissions to fly international (they are yet to start their international flights).

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