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Wed 13 Nov 2013 03:36 PM

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Qatar offers fuel discount to treble India airline seats: report

Gulf state wants to increase seat capacity to India from 24,800 to 72,600 to compete against Dubai, Abu Dhabi

Qatar offers fuel discount to treble India airline seats: report
Qatar Airways $695.62.

Qatar could offer India fuel discounts in exchange for airline seat entitlements on flights between the two countries, India’s The Financial Express has reported.

The Gulf state is due to open its new international airport early next year and wants to almost treble seat capacity on lucrative Indian routes from 24,800 to 72,600, according to the newspaper. The additional capacity could potentially earn Qatar Airways up to $200m over 10 years.

India earlier this year allowed Abu Dhabi-based carrier Etihad to increase its capacity from 13,000 seats to 49,000 per week after the UAE government committed to investing $50bn in India’s infrastructure sectors in the coming years.

India's competition regulator has approved Etihad's $325 million deal to buy a 24 percent stake in Jet Airways, the regulator said on its website on Tuesday. Jet said last month it expected to complete the transaction this quarter. It already has the Indian cabinet's approval.

In the Qatar case, the newspaper said national security adviser Shiv Shankar Menon had proposed that India seek fuel discounts on an additional 3m tonnes of liquefied natural gas (LNG) in a long-term contract between India’s Petronet LNG (PLL) and Qatar’s Ras Laffan Liquefied Natural Gas (RasGas).

The discount would “match the concessions” given to Qatar Airways, he reportedly said.

PLL officials said a discount of 10-12 cents per million British thermal units would be needed to offset the revenue loss to Indian carriers if increased seats were awarded to Qatar Airways.

The proposed contract would be over and above the 7.5m tonnes per annum of LNG that PLL signed with RasGas in 1999.

The civil aviation ministry also has been instructed to determine the number of additional seats that could be allocated to Qatar Airways, a senior civil aviation ministry official told the newspaper.

The increased capacity would help Doha compete against Dubai and Abu Dhabi as a regional aviation hub.

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