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.


Student loan debt still crippling burden for millions of Americans

Updated 20 November 2018
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Student loan debt still crippling burden for millions of Americans

  • 42.2 million Americans were repaying a federal student loan at the end of June 2018 for a total sum of nearly $1.5 trillion
  • Many students take out loans from the federal government or private lenders

WASHINGTON: Michael Bloomberg’s record $1.8 billion donation for financial aid to Johns Hopkins University highlights the problem of student debt in America, which can still be a burden even years after graduation.
According to the Department of Education, 42.2 million Americans were repaying a federal student loan at the end of June 2018 for a total sum of nearly $1.5 trillion, the largest volume of debt after home loans.
Bloomberg, the former mayor of New York, said he was making the gift to his alma mater to help qualified low- and middle-income students more easily afford access to university in a country where post-secondary education fees at elite schools routinely exceed $50,000 a year, a prohibitive barrier for most families.
“I was lucky: My father was a bookkeeper who never made more than $6,000 a year. But I was able to afford Johns Hopkins University through a National Defense student loan and by holding down a job on campus,” Bloomberg, who also founded the financial news service of the same name, wrote in a New York Times op-ed.
The donation, believed to be the biggest ever to a university, “will ensure that we are able to recruit more first-generation and low-income students and provide them with full access to every dimension of the Johns Hopkins experience,” its head Ronald Daniels said.
Currently, 44 percent of students at the institution in Baltimore, Maryland, complete their studies in debt, on average owing more than $24,000, university data shows.
For Sandy Baum, a university professor at the Urban Institute, Bloomberg’s gift is “great” but “that’s just a drop in the ocean.”
His move would have had a bigger impact if he gave money to improve the quality of education for more students, in less elite private or public institutions, she told AFP, adding that they sorely lack funding.
Baum is not opposed to student loans because for most students, the choice becomes one between not going to university or borrowing to go.
Most students’ loans, she says, amount to between $15,000 and $20,000 but getting $40,000 in debt is not unusual for a bachelor’s degree (four years of study).
The College Board estimates the average cost of a four-year course in a private university at $34,740, not counting additional accommodation and living expenses.
Many students take out loans from the federal government or private lenders.
Some, especially the less wealthy, fall into the spiral of over-indebtedness when they find themselves unable to repay their loans.
They no longer have access to credit, cannot rent a home or buy a car. A local cable channel this summer launched a game, “Paid Off,” in which the participants battle it out to see who has their student debt cleared.
The problem worries everyone — even the US central bank. “As student loans continue to grow and become larger and larger, then it absolutely could hold back growth,” Jerome Powell warned in March.
Joanna Darcus, a lawyer for the consumer protection organization NCLC, welcomed Bloomberg’s big donation.
It’s needed in our “completely broken system of financing university education by debt,” she said.
For students from low-income backgrounds “it is very important to lower the cost of education” as student debt increases the gap between rich and poor, she told AFP.
The NCLC advocates for an increase in the number and size of university scholarships.
“If its possible for people to go to school without incurring debt we are all better off; we don’t have to spend money on debt collection and student debt doesn’t impair the decision-making on a personal, professional or financial level,” she added.