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Qatar plans first fully foreign-owned airline in India

 
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PostPosted: Wed Mar 08, 2017 8:22 pm    Post subject: Qatar plans first fully foreign-owned airline in India Reply with quote

http://timesofindia.indiatimes.com/business/india-business/qatar-airways-plans-fully-qatari-owned-airline-in-india/articleshow/57539007.cms

Qatar Airways plans first fully foreign-owned airline in India

Mar 8, 2017

India may soon get its first fully-foreign owned airline after the Modi government allowed 100% FDI in the sector last June. Qatar Airways CEO Akbar Al Baker said in Berlin Wednesday that he plans to start an airline in India with the investment arm of Qatar government.

A Qatar Airways spokesperson quoted the CEO saying that since India now allows 100% FDI, he plans to do so with Qatar Investment Authority. Baker also said that he will be making an application to launch a domestic airline in India soon.

Qatar Airways has for many years been eyeing a stake in IndiGo but the Indian budget carrier has not done so.

Last June, the Modi government had allowed Indian carriers to be fully owned by foreign entities. While foreign carriers will still be required to have up to 49% stake in airlines here, they can now get a foreign partner like a sovereign wealth fund or an institutional investor and not look for an Indian partner to put in the remaining 51%.

However, India is yet to review the issue of "substantial ownership and effective control (SOEC)" in the fully-foreign owned airlines it had allowed last June. Currently, flying licences are given to an airline in India only if its chairperson and two-third of the directors are Indians and if the SOEC is with Indian nationals.

The issue of SOEC being with Indians arises at two times -- issuing the operating licence and giving bilateral rights that India has to its airlines for flying abroad.

The requirement of SOEC is also a condition from International Civil Aviation Organisation (ICAO) regarding bilateral rights.

Which means if an Indian airline has more than 49% foreign ownership, then there may be an issue in getting the bilateral rights for flying abroad. But there will be no bar on flying within India.

At present, only three Indian carriers have investment by foreign airlines. Abu Dhabi's Etihad has a 24% stake in Jet Airways. Tata Group holds 51% stake in Vistara and AirAsia India each, with Singapore Airlines and AirAsia Berhad having the remaining 49% in them respectively.

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ameya
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PostPosted: Thu Mar 09, 2017 11:08 am    Post subject: Reply with quote

See a lot of roadblocks in this, including ICAO rules of bilaterals based on ownership
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PostPosted: Thu Mar 09, 2017 1:09 pm    Post subject: Reply with quote

ameya wrote:
See a lot of roadblocks in this, including ICAO rules of bilaterals based on ownership


I'm sure we'll all read about it on your blog.
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PostPosted: Thu Mar 09, 2017 7:32 pm    Post subject: Reply with quote

I feel like the 100% rule is meant to mean one 49% foreign partner and then the rest can be publicly traded and owned by foreigners. Not a loophole way for a foreign airline to control a carrier. I think this airline should count towards Qatar's bilateral. Also I would rather a current indian carrier join one world and start expanding abroad. India needs more nonstop connectivity to the world. Transiting through DOH, AUH, DXB is not a viable long term option for a country as big as india. Its time the GOI puts in place rules that facilitate this. The ME3 should be grateful for the seats they already had. If planes are full to the ME, then great raise fares. At least Indian carriers can grow then. That said, I think the ME3 will start to shift seats back to O&D if seats really get tight (and I think only DXB comes close to Indian carriers even maxing out). So there is still a ton of room to grow capacity to the ME by indian carriers.
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PostPosted: Fri Mar 10, 2017 7:14 am    Post subject: Reply with quote

http://timesofindia.indiatimes.com/business/india-business/old-indian-carriers-to-oppose-qatar-air-proposal/articleshow/57564769.cms

Old Indian carriers to oppose Qatar Air proposal

Mar 10, 2017

Qatar Airways' plan to set up a 100% Qatari-owned domestic airline in India is all set to get a red carpet treatment from the Modi government, but 'old' Indian carriers are gearing up to oppose the proposal tooth and nail.

Aviation minister Jayant Sinha told TOI on Thursday that India now has among the most liberal FDI regimes in the world for the aviation sector. "Qatar and other airlines are very welcome to explore how they can establish themselves in India under that FDI regime. Under our regulations, it is possible to have a 100% foreign-owned carrier in India," he said. India since last June, allows 100% foreign-owned domestic carrier, in which a foreign airline can have up to 49% stake and foreign investment arm/s the remaining 51%.

The Federation of Indian Airlines (FIA), comprising Jet Airways, IndiGo, SpiceJet and GoAir, is planning to oppose Qatar Airways' (QA's) Indian plan on the ground that no country allows 100% foreign-owned domestic carriers. "Indian carriers cannot own or control airlines in other countries. It will be a complete sellout of Indian interests as it hurts desi airlines and will lead to setting up of another hub for Indian traffic abroad (referring to the QA base of Doha). It is a complete reversal of 'Make in India'," said an FIA member.

FIA had used the same argument to oppose Singapore Airlines and AirAsia's JV airlines with the Tata Group in India. It says that FDI in airlines was allowed to ensure that existing Indian carriers get much-required funds and expertise and not for JV startups.

The government, however, dismisses this view. "We have to distinguish between investment and operation. The investment and carrier may be 100% foreign, but the airline will be 100% Indian in terms of giving jobs, operations and expenditure. It will benefit Indian economy tremendously if we have investment in more airlines. Anyway, all required security clearances will have to be obtained before it can fly," Sinha said.

He made a strong pitch for foreign investment, saying India's aviation market is still under-penetrated and more investment is needed to make flying more common by making it more affordable. India last year saw 10 crore single domestic trips and 5 crore single international trips (a return journey counted as two as that person took two flights).

"We have a middle class of 30 crore and in the long term our aviation market will grow at 12% to 13%. India very easily has the potential of having 40-50 crore air trips annually (up from 2016's 15 crore) and be the size of China's aviation market, as our GDP grows. We have tremendous potential for growth. Our aviation market is set to double and triple," Sinha, a former junior finance minister, said.


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