Qatar Air to Establish New Carrier in India

Qatar Airways is planning to establish a new airline for short haul flights in India with 100 aircraft renewing its push to garner a larger share of one of the fastest growing markets for travel in the world.

The Gulf air carrier will apply with authorities in India soon, said its CEO Akbar Al Baker on Wednesday during the ITB Berlin travel fair.

Qatar Investment Authority, which is the sovereign wealth fund backing Qatar Air, is the best vehicle in which to establish a new airline in India, said the CEO. He added that the fund could use Qatar Air to run the operation.

Qatar Air was knocked back during a bid in 2015 to increase its footprint in India through the purchase of a stake in Indigo a discount specialist and did not buy shares piecemeal neither during nor after an initial public offering that came later.

While the government of India limits foreign airlines to just a 49% stake in its own carriers, a relaxing of restrictions in 2016 means that foreign sovereign wealth funds as well as portfolio investors could potentially acquire holdings in the amount of 100%.

The plan for India would not involve any joint venture, said Al Baker.

He added that he intends to take advantage of the very progressive moves in the country related to outside investment. While the wealth fund might be in compliance with the new rules for foreign ownership, CEO Al Baker did not explain how the airline would maintain enough distance from the short haul carrier to satisfy the requirement of the government.

Al Baker in prior occasions sought to use the wealth fund as a way for expansion India, with the fund not able to secure a stake in Indigo during its IPO after it did not gain approvals in time.

If this most recent plan is successful the new airline’s controlling foreign ownership would limit it to only domestic flights under the rules of the International Civil Aviation.

Currently Qatar Air has a 20% ownership of IAG SA the parent to British Airway, 10% in Latam Airlines Group, the largest carrier in South America and 49% in Meridiana SpA in Italy.

The company, based in Doha, also wants to begin an airline for just Saudi Arabia, although the license it needs had been delayed for a number of years, which prompted it to look elsewhere for places to fly.

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