Qatar plans to launch foreign-owned Airlines in India

Qatar Airlines plans to launch a fully foreign owned airlines in India. This has been made possible after the Modi operated government allowed 100 percent FDI in the airline sector last June. Akbar Al Baker the CEO of Qatar Airways on Wednesday in Berlin said that he plans to open this foreign airline in India with the help of funding from the Qatar Government.

A spokesperson of Qatar Airlines said that after the CEO observed that India allows 100% FDI, he got this idea and plans to take a funding arm from the Qatar Investment Authority. Al Baker also said that he will send an application to Indian government soon for the launch of domestic airlines. Qatar has been planning to buy stakes in the IndiGo airlines for quite some time. But these advances have been rejected by the IndiGo airlines.

Akbar Al Baker the CEO of Qatar Airways speaking in Berlin.

The BJP government in last June allowed 100% Foreign Direct Investments for airline sector and allowed Indian carriers to be fully owned and operated by the foreign entities. The foreign carrier can hold 49% stake in airlines here and can get a foreign partner as an institutional investor for the 51% investment and not look for an Indian partner.

But India is yet to review the issue of “substantial ownership and effective control (SOEC)” in the foreign-owned airlines. Also, currently the flying licenses are given to only those companies that have an Indian CEO and also two third of the board members are Indians and SOEC is with the Indian nationals. This SOEC issue arises twice, issuing an operating license and second when giving bilateral rights that India has to the airlines it has for flying abroad.

Also, the necessity of SOEC is a condition from International Civil Aviation Organisation(ICAO) in regard to bilateral rights. This means that an airline that has 49% foreign ownership may have an issue of getting bilateral rights to fly out of the country but has no bar for flying anywhere in India.