Qatar Airways’ India airline plan may face opposition from airlines lobby FIA
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New Delhi: Domestic airlines grouped in the Federation of Indian Airlines (FIA) are preparing to oppose Qatar Airways’ proposed launch of an airline in India even before it applies for a licence to do so.
“We will definitely think of taking this to the courts,” said a top executive at a member-airline of the lobby group, who declined to be named.
Qatar Airways CEO Akbar Al Baker said on Wednesday that it will start an airline in India, the world’s fastest-growing aviation market, together with Qatar's sovereign fund.
FIA members, including InterGlobe Aviation Ltd-run IndiGo; GoAir, operated by Go Airlines Ltd; SpiceJet Ltd and Jet Airways (India) Ltd, control nearly 80% of the domestic aviation market.
FIA has already taken the aviation ministry to court over grant of licences to AirAsia India, which is 51% owned by Tata Sons and 49% owned by Malaysia’s AirAsia Bhd; and Vistara, in which Tata Sons and Singapore Airlines Ltd are partners.
Opponents of a licence being granted to Qatar Airways point out that Qatar does not allow foreign airlines to start airlines there so there is no reciprocity. Secondly, the control of airlines should be in local hands, as some international conventions suggest. Also, there is the question of national security, the executive cited above said.
FIA has already made these points in an 11-page letter to the aviation ministry on 30 December against allowing 100% foreign direct investment in Indian airlines, which has been reviewed by Mint.
An FIA spokesman did not respond to an email seeking comment.
Qatar Airways is British Airways-owner IAG’s biggest shareholder. The Doha-based airline also owns stakes in Latam Airlines Group SA, South America’s biggest carrier, and Italy’s second-largest airline, Meridiana Fly SpA. Qatar has amassed $335 billion in assets around the globe, making its sovereign wealth fund the 14th largest in the world, according to the Sovereign Wealth Fund Institute.
To be sure, Indian carriers also have international ownership.
Abu Dhabi-based Etihad Airways PJSC has a 24% stake in Naresh Goyal’s Jet Airways. Sovereign wealth fund-backed Istithmar PJSC held a stake in SpiceJet in the past. One of IndiGo’s founders, Rakesh Gangwal, is based in the US.
A second airline executive who did not want to be named said as long as Qatar Airways has Indians as directors on the board of its Indian arm and senior management, it may meet the criterion of local control as defined by Indian rules.
“What you will potentially see is all existing airlines, including the new ones, joining FIA to oppose Qatar's entry or people pushing the theory that this will hurt Air India the most to build their case,” this executive said.” In the end, however, it (a Qatar Airways-owned airline) will be good for the sector overall.”