Qatar Airways rethinks Indian plans due to foreign ownership rules

Enquiries to start the application process in India were rejected over QIA’s ownership of Qatar Airways, Qatar Airways CEO Akbar Al-Baker said. (Reuters)
Updated 05 September 2018
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Qatar Airways rethinks Indian plans due to foreign ownership rules

  • India now allows 100 percent ownership of India-based airlines, up from 49 percent, but only with government approval
  • Qatar Airways has been interested in investing in IndiGo for several years, though never bought into the airline

NEW DELHI: Qatar Airways is reviewing plans for its own domestic Indian airline due to “confusing” foreign ownership rules and could 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.
Qatar Airways has been interested in investing in IndiGo for several years, though never bought into the airline.
Qatar Airways would be interested in buying Air India which the government wants to sell a 76 percent stake in, Baker said, adding it would only want the core airline assets and not other parts of the business such as ground handling services.
Any bid for Air India would be dependent on working with a strong Indian partner, Baker said, adding that the airline’s debt was not an issue. India wants to offload about $5.1 billion of Air India’s debt.
“The (Air India) debt can be taken and restructured. The issue is with whom we will partner.”
Qatar Airways expects to release its annual results in two weeks’ time, Baker said. He has previously said the airline made a “substantial” loss, which it blamed on a regional dispute that has banned the airline from four Arab countries.


Davos organizer WEF warns of growing risk of cyberattacks in Gulf

Updated 16 January 2019
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Davos organizer WEF warns of growing risk of cyberattacks in Gulf

  • Critical infrastructure such as power centers and water plants at particular risk, says expert
  • Report finds that unemployment is a major concern in Bahrain, Egypt, Morocco, Oman and Tunisia

LONDON: The World Economic Forum (WEF) has warned of the growing possibility of cyberattacks in the Gulf — with Saudi Arabia, the UAE and Qatar particularly vulnerable.

Cyberattacks were ranked as the second most important risk — after an “energy shock” — in the three Gulf states, according to the WEF’s flagship Global Risks Report 2019.

The report was released ahead of the WEF’s annual forum in Davos, Switzerland, which starts on Tuesday.

In an interview with Arab News, John Drzik, president of global risk and digital at professional services firm Marsh & McLennan said: “The risk of cyberattacks on critical infrastructure such as power centers and water plants is moving up the agenda in the Middle East, and in the Gulf in particular.”

Drzik was speaking on the sidelines of a London summit where WEF unveiled the report, which was compiled in partnership with Marsh and Zurich Insurance.

“Cyberattacks are a growing concern as the regional economy becomes more sophisticated,” he said.

“Critical infrastructure means centers where disablement could affect an entire society — for instance an attack on an electric grid.”

Countries needed to “upgrade to reflect the change in the cyber risk environment,” he added.

The WEF report incorporated the results of a survey taken from about 1,000 experts and decision makers.

The top three risks for the Middle East and Africa as a whole were found to be an energy price shock, unemployment or underemployment, and terrorist attacks.

Worries about an oil price shock were said to be particularly pronounced in countries where government spending was rising, said WEF. This group includes Saudi Arabia, which the IMF estimated in May 2018 had seen its fiscal breakeven price for oil — that is, the price required to balance the national budget — rise to $88 a barrel, 26 percent above the IMF’s October 2017 estimate, and also higher than the country’s medium-term oil-price target of $70–$80.

But that disclosure needed to be balanced with the fact that risk of “fiscal crises” dropped sharply in the WEF survey rankings, from first position last year to fifth in 2018.

The report said: “Oil prices increased substantially between our 2017 and 2018 surveys, from around $50 to $75. This represents a significant fillip for the fiscal position of the region’s oil producers, with the IMF estimating that each $10 increase in oil prices should feed through to an improvement on the fiscal balance of 3 percentage points of GDP.”

At national level, this risk of “unemployment and underemployment” ranked highly in Bahrain, Egypt, Morocco, Oman and Tunisia.
“Unemployment is a pressing issue in the region, particularly for the rapidly expanding young population: Youth unemployment averages around 25 percent and is close to 50 percent in Oman,” said the report.

Other countries attaching high prominence to domestic and regional fractures in the survey were Tunisia, with “profound
social instability” ranked first, and Algeria, where respondents ranked “failure of regional and global governance” first.

Looking at the global picture, WEF warned that weakened international co-operation was damaging the collective will to confront key issues such as climate change and environmental degradation.