Qatar Airways' India plan stuck in runway; CEO Akbar Al Baker blames policy

Qatar Airways may put its proposed India venture on the back burner as restrictive foreign investment rules may hamper its plans.

Setting a deadline for itself, Qatar Airways CEO Akbar Al Baker said the company would wait another 12 months to take a call on starting an airline in India. 

“We will lose interest in time because we have a fund that we would like to invest. If we do not invest in time, we have to use that fund somewhere else,’’ Akbar told newspersons at a media interaction on the side lines of the ‘International Aviation Summit’ organised jointly by Ministry of Civil Aviation and International Air Transport Association. “It is like you have money to invest in an iPhone, but if is not available you will go to Samsung,” he said.

The airline CEO said that the restrictive policy on foreign airlines’ investment in the sector was confusing. The government allows 100 per cent FDI in a scheduled airline. But it applies only where there is no investment by a foreign airline. ‘’It does not make sense to differentiate between a foreigner and a foreign airline. Both are foreigners,” Al Baker said when asked whether he wants the Indian government to allow a foreign airline to invest 100 per cent in an airline in the country to operate only in the domestic skies. 

In response to a query from Business Standard, Civil Aviation Secretary Rajiv Nayan Choubey said the current policy of the government is that the substantial ownership and effective control should remain with Indian nationals and they will have to comply. "If he thinks that he should have an airline that is entirely owned by Qataris, presently it is not possible. If he thinks that he can run an airline that is 49 per cent foreign owned 51 per cent Indian owned, that is possible. They will have to find an Indian partner and it is possible. Singapore Airlines did it with Vistara,” Choubey said.

While stating that Qatar Airways was not in talks with an Indian airline at present, he pointed out, “we have shown interest to IndiGo many times”. According to Al Baker, the firm is not ready, apart from through an IPO, for a very small stake. ‘’We do not want to take 2 to 3 per cent. We will take a substantial stake — 10-15 per cent.’’

Qatar Airways does not want to invest in an Indian airline just because it needs funds. “We need to invest in an airline which will give us a return on investment. It should be efficiently run and have growth potential,” he said. Al Baker is however open to the idea of partnership with an Indian airline, provided there’s a willing partner. He replied in the positive when asked if he looked at the opportunity to invest in Air India when the government announced divestment of stake in the state-owned airline.

“There is always an opportunity to invest in an airline in India… The market has had a double-digit growth for a long time but that does not mean there is no space for any one else,” he said while replying to questions on whether this was the best time to invest in the backdrop of poor financial health of the sector, rupee depreciation, sky rocketing oil prices and depressed air fares.

The firm’s last investment was in Air Italy. “We are all the time looking at investments and most importantly in India…. I am always telling everybody that India is a sleeping economic giant. There is potential here which is not available in many other countries,’’ the CEO said.