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Tue 25 Apr 2017 09:31 AM

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Qatar Airways planning new stake in foreign carrier

Qatar to submit application for Indian carrier 'in a few weeks'

Qatar Airways planning new stake in foreign carrier
Qatar Airways Group Chief Executive, His Excellency Mr. Akbar Al Baker and Qatar Airways Chief Commercial Officer, Mr. Ehab Amin at the ATM 2017 press conference

Qatar Airways plans to buy a stake in another foreign airline, extending an expansion push that’s seen the Gulf carrier build up overseas holdings and announce new routes to the US, even as President Donald Trump’s seeks to restrict travel to the world’s largest economy.

The state-owned company, which has expressed interest in Royal Air Maroc in the past, expects to finalise the purchase of a 49 percent stake in Italy’s Meridiana in the coming days. The Gulf airline also plans to submit a joint application with Qatar Investment Authority to set up a new Indian carrier in “weeks,” CEO Akbar Al Baker said on Monday.

“We see potential in another acquisition in a region which, unfortunately, I cannot disclose at the moment,” Al Baker said in an interview with Bloomberg Television in Dubai. “The world is still too large, and we see there is potential for us in still many other regions and cities in the world.”

Qatar Airways has aggressively expanded in recent years, accumulating 20 percent of British Airways parent IAG SA and buying 10 percent of South America’s biggest carrier LatAm Airlines Group.

While the strategy is a gamble, given restrictions on foreign influence and control in most countries, Al Baker said his company will seek to help cut costs by cooperating with its partners on ordering planes and securing supplies.

Read more - Qatar to submit application for Indian carrier 'in a few weeks'

For the new Indian carrier, the majority stake would be owned by QIA, with Qatar Airways taking a minority stake, sidestepping restrictions by the Indian government on ownership of domestic carriers by foreign airlines.

The new carrier would have a fleet of 100 narrow-body planes and Qatar Airways is open to offers from Boeing, Airbus and Embraer as well as revived interest in Bombardier's C Series, Al Baker said. 

Qatar to submit application for Indian carrier 'in a few weeks'

The Doha-based airline is also continuing to pursue its own growth, announcing plans to make San Francisco its 15th US destination starting in 2018.

Qatar Airways has remained bullish on the US, even after Trump’s administration targeted the region with an attempt to block travel from six predominantly Muslim nations and a ban on carrying on laptop and tablet computers on flights from Middle East airports, including Doha.

By contrast, Dubai-based Emirates last week cited weaker demand caused by the restrictions as the cause for scaling back US services.

Qatar Airways planes to the US are flying about 75 percent full, down about half a percentage point since the laptop ban.

“We didn’t have massive declines like other carriers, so we still have robust loads to the US,” Al Baker said, vowing not to reduce flight frequencies on American routes.

An association of US airlines and labour unions, responding to Qatar Airways’ plans for the San Francisco route, reiterated a claim that the Gulf carrier receives illegal subsidies.

Al Baker said he isn’t concerned about US industry pushback, as Trump “is a very wise individual and a very good businessman, and I don’t think he will buy into bullying by the three American carriers.”

The carrier is opening a total of 26 new routes this year and next, in addition to the California destination.

“The US is not the entire world,” the CEO said. “We have a lot of other opportunities, a lot of other new markets which we will keep expanding to.”

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