Qatar Airways may Buy Stake in SpiceJet

NEW DELHI, Jan 15 (TOI) : Low-cost carrier (LCC) SpiceJet could be the second Indian carrier after Jet Airways to get foreign direct investment from an international airline. The LCC is reportedly in talks with some foreign carriers, with highly-placed sources saying Gulf carrier Qatar Airways being the most likely suitor, and the deal could materialize this quarter.

SpiceJet, which is engaged in a constant battle with Air India for the number three slot in terms of domestic market share, has a market capitalization of Rs 2,133 crore. "FDI in SpiceJet is likely to happen in this quarter itself. The airline is in talks with some foreign airlines and one more investor," said sources, while refusing to spell out the percentage of stake sale that is being discussed and the valuation.

The aviation ministry has not officially been informed of an impending stake sale in the LCC to a foreign airline, unlike the Jet-Etihad talks which have now been confirmed by Naresh Goyal's carrier to the BSE. "The information we have gathered is that SpiceJet may be selling stake to Qatar Airways but we are waiting for a word from the airline," said a senior official.

Airline CEOs in India say that foreign airlines are eying desi carriers with a lot of interest, especially IndiGo, Jet, SpiceJet and Go Airways. "What is keeping them away is the crazy taxation on jet fuel and exorbitant airport charges, especially in Delhi. Because of these two factors and the overall slowdown, cost of flying has gone up enormously and domestic flying has crashed. IATA has termed India as the worst performing domestic market in the world. So, the high costs and negative perception of the country is leading to foreign investors being a little wary of putting money in desi airlines," said a CEO of a large airline.

Apart from showing interest in Jet and SpiceJet - IndiGo promoters have so far not shown any interest in selling their stake to anyone - some foreign carriers are also looking at start-ups here. While world's largest LCC, Air Asia, is hunting for an Indian partner, Captain G R Gopinath of Air Deccan fame is expected to finalize a foreign carrier by the end of this month for his proposed new venture.

With all Indian carriers facing huge losses with Kingfisher grounded and Air India facing financial crisis, the government is more keen on existing players getting some investment through the FDI route.

As a result, the aviation ministry is not very keen on issuing new licences to those who propose to launch start-ups, including Gopinath's latest proposition.

Comment on this article


    Tue, Jan 15 2013

    Yes, Indian domestic segment could be worst performer for Airlines concerned.we have immediate example was grounding of KINGFISHER Airline.
    Coming to the stake of Spice Jet to Qatar Airways, it good passenger & Airlines point of view because compared to India Jet fuel is cheaper in middle east countries and FDI means more scope of work with better services and competitive pricing.Govt India need to look in to the problem DOMESTIC ROUTES of vertiginous Indian Airlines with regarding to tax/Hangar/Jet parking prices and fuel prices.SPICE JET introduced RIYADH-DELHI sector and promised to cover GCC cities to Indian cities.

    DisAgree Agree [4] Reply Report Abuse

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