India can soon get its first full-foreign owned airline after the current Narendra Modi’s government allowed 100 per cent FDI in the sector last June. CEO of Qatar Airways CEO Akbar Al Baker said in Berlin on Wednesday that he plans to start an airline in India with the investment arm of Qatar government.
A spokesperson for Qatar Airways quoted the CEO says that since India now allows 100 per cent FDI, he plans to do so with Qatar Investment Authority. Al Baker also said that he will be preparing an application to launch a domestic airline in India soon.
For many years Qatar Airways have been eyeing a stake in IndiGo for many years, but the Indian budget carrier has not done so.
The government allowed Indian carriers to be totally owned by foreign entities. While foreign carriers will still need to have up to 49 per cent stakes in airlines, they can tie up with a foreign partner, like a sovereign wealth fund or an institutional investor instead of tying up with an Indian partner to put in the remaining 51 per cent.
However, the Indian government is yet to review the issue of SOEC (substantial ownership and effective control) in the full foreign owned airlines, which it had allowed last June. At present, flying licenses are given to airlines, whose chairperson and two-third directors are Indians and if the SOEC is with Indian nationals.
The issue of SOEC being with Indians arises at two times, once while issuing the operating license and second, when bilateral rights are given that India has to give to its airlines for flying abroad.
The SOEC requires a condition from ICAO (International Civil Aviation Organization) regarding bilateral rights.
This means if an Indian airline has more than 49 per cent of foreign ownership, then there might be an issue in getting the bilateral rights for international flights. But there will no bar on domestic flights.
Right now, there are only three Indian carriers that are invested by foreign airlines; Abu Dhabi’s Etihad has a 24 per cent stake in Jet Airways. Tata Groups hold 50 per cent stake in Vistara and AirAsia India each, with Singapore Airlines and AirAsia Berhad has the rest 49 per cent share in them respectively.
Viraat an Indian Naval Ship no more
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