Qatar Airways rethinks Indian plans due to foreign ownership rules

Qatar Airways is reviewing plans for its own domestic Indian airline due to “confusing” foreign ownership rules and could opt to work with a partner in India or take a stake in IndiGo instead, its chief executive said on Tuesday.

The state-owned Gulf carrier has long coveted the Indian aviation market, which is the fastest growing in the world, and in 2017 said it would set up a domestic airline, a year after India eased foreign investment rules for the sector.

“We are really very interested to launch an airline in India, but the regulation is a little bit confusing to us,” Qatar Airways CEO Akbar al-Baker told reporters in New Delhi.

India now allows 100 percent ownership of India-based airlines, up from 49 percent, but only with government approval. Meanwhile, foreign airlines continue to be limited to 49 percent ownership.

Qatar Airways planned to own a minority stake of the domestic airline with sovereign wealth fund Qatar Investment Authority (QIA) being the majority owner.

However, enquiries to start the application process in India were rejected over QIA's ownership of Qatar Airways, Baker said. “We really don't know what is allowed,” he said.

Qatar Airways could now work with an Indian partner for the domestic airline or alternatively seek a 15 to 25 percent stake in low cost airline IndiGo. If both of those failed then the airline would have to forget about the domestic market, Baker said.