Thursday, March 09, 2017

Qatar's India airline plan may fly into 'ownership' wall

Mumbai: While Qatar Airways chief Akbar Al Baker has announced that the cash-rich Gulf carrier will soon start a fully-owned foreign airline in India, sceptics claim that it won't be a cakewalk.

Though the challenges are many, the main roadblock will be International Civil Aviation Organisation (ICAO) guidelines over 'effective control and ownership' of the airline, said Devesh Agarwal, a Bengaluru-based aviation analyst, said.

The ICAO had last year expressed concerns that a foreign-owned airline operating from India may have legal and procedural issues in obtaining seats under bilateral rights for flying abroad.

The air service agreements (ASAs) signed between two countries usually mandate that airlines from either country have their substantial ownership and effective control (SOEC) vested with citizens of the particular country. These ASAs are based on ICAO template, and even though they are not binding, most countries include them in their bilateral rights agreements.

ICAO had raised the concerns after India further opened the aviation sector last year.

As per the new rules, 100% FDI is allowed with the condition that no foreign airline will have a stake. However, if there is a foreign airline partner, then the FDI is limited to 49%. Vistara and AirAsia entered the business under the second option.

09/03/17 Shahkar Abidi/DNA