New Delhi: Qatar Airways will wait another year to start a local airline in India before giving up plans for the world’s fastest growing aviation market, chief executive Akbar Al Baker said.
“We will lose interest in time," Al Baker said on the sidelines of an aviation summit in New Delhi. “We have a fund from which we would like to invest, and if we don’t invest in time, we will have to use the fund somewhere else to invest."
Qatar Airways had in the past expressed interest to buy a stake in InterGlobe Aviation Ltd, which runs IndiGo, India’s largest carrier by market share.
ALSO READ: Qatar Airways to soon apply for launch of Indian airline, says CEO
The move, however, did not materialize.
“We need to find the right partner. Earlier, we have shown our interest to IndiGo many times. They didn’t refuse, but they were not ready to go ahead; and they went for an IPO (initial public offering)," Al Baker said.
“Qatar Airways doesn’t want to take a 2-3% stake, we want a substantial stake...at least 10-15%," he said, adding that the airline is not in talks to pick up a stake in any other Indian carrier.
“We will not invest in an airline because they need funds. We will invest in an airline, which will give us a good return on investment," he added.
Al Baker said the rules are still unclear on 100% foreign ownership of Indian carriers.
ALSO READ: Qatar Airways says offered 25% stake by US start-up airline
“What we are given to understand is that an airline cannot own 100%. A foreigner can, but not an airline. I don’t know what is the difference between a foreigner and an airline. If Qatar Investment Authority own 51% and Qatar Airways owns 49%, that is not allowed. Again, this is very ambiguous. The rule is not very clear," Al Baker said.
The Indian aviation market is huge and has recorded double-digit growth for years; so is there always an opportunity to invest, Al Baker said, adding that there is a potential for aviation in India, which is not present elsewhere.
Qatar Airways, and its parent—Qatar Investment Authority (QIA)—are looking at opportunities to invest in India, including in non-airline related businesses.
The airline is also looking to increase its cargo operations to India.
“We are ramping up our cargo operations in India, but we don’t want to flood capacity which will impact yield," Al Baker said.
Meanwhile, the central government is likely to turn down Qatar Airways’ plan to launch an Indian operation by itself.
Civil aviation secretary R.N. Choubey said Qatar Airways can’t launch an airline in India without a domestic partner.
“Current policy of the government is that the substantial ownership and effective control should remain with Indian nationals, and they will have to comply. You cannot have substantial ownership of more than 50% because then you are violating the policy," Choubey said on the sidelines of the International Aviation Summit organised by International Air Transport Association (IATA).
He said, however, that so far, no formal proposal had been received from Qatar Airways.