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Last updated: 27 Sep, 2014  

Flight.9.jpg Qatar Airways denies investing in SpiceJet

IANS | 16 Jan, 2013
Leading Gulf-based Qatar Airways Tuesday denied that it was investing in SpiceJet or any other Indian airline as shares of budget carrier gained around five percent in intra-day trade at the Bombay Stock Exchange (BSE) on the back of the reported deal.

"This is pure speculation by individuals who deliberately want to spread such unfounded rumours to raise the stock value of their entities," Qatar Airways chief executive Akbar Al Baker said in a statement hours after the budget carrier, controlled by media baron Kalanithi Manran, clarified to the regulator that there was no such transaction or talks.

Admitting that India was a huge market and a potentially lucrative one, Al Baker hastened to confirm that his airline was not talking to any Indian carrier.

"While we have expressed interest in expanding our presence in India, we will only be interested in any potential investment once we are sure regulations and laws are properly liberalised. I can confirm we are currently not talking to any Indian airline," he asserted.

Earlier, SpiceJet shares jumped 4.65 percent to Rs.46.10 per share of Rs.10 par value from Monday's closing rate of Rs.44.04 in intra-day trade on the Bombay Stock Exchange (BSE) amid reports that Qatar Airways was planning to invest in the airline.

"Though few investors have evinced interest in the company post-government of India allowing FDI (foreign direct investment) in the civil aviation sector to foreign airlines, it will be very premature to comment on the possibilities of any fresh equity issuance to such interested parties or confirm or deny names of any specific entity," the low-cost carrier (LCC) said in a statement to the regulator BSE.

Talk of a possible stake sale has been doing the rounds for months, ever since the government allowed, in September 2012, foreign airlines to pick up 49 percent shares in domestic carriers.

The airline had the third largest domestic market share of 19.5 percent in November 2012 after IndiGo and Air India.

The carrier is also aggressively trying to expand its domestic and international network with a fleet size of 51 aircraft, including 15 Q400 next-gen turboprops of Bombardier and a Boeing 787-800.

The government Nov 9, 2012 also allocated new flying rights to domestic carriers, including SpiceJet.

The carrier got approvals for new flight services to Lucknow-Al Najaf in central Iraq; Varanasi-Al Najaf; Delhi-Macau and Delhi-Ho Chi Minh City in Vietnam.

The carrier also expanded its international network by adding new flights between Kochi-Male, Kochi-Dubai and Dubai-Ahmedabad.

The airline was the first private passenger carrier to have received the government's approval for importing aircraft turbine fuel (ATF) directly April 18, 2012.

Aviation analyst Sharan Lillaney of broking firm Angel Broking told IANS that SpiceJet is one of the favourites amongst Indian carriers which can attract FDI.

"SpiceJet is a good buy for international airlines as the airline has very little debt and is in the fastest growing sector, which is low cost. So valuation of SpiceJet is going to be very attractive," Lillaney said.

Foreign carriers were so far not been allowed to directly invest in Indian carriers for security reasons, although 49 percent FDI by non-airline players was allowed.

The Indian civil aviation sector has been going through a tough operating environment as high fuel and interest costs have hurt it. The government expects that the decision will help bring in more funds to the airlines, which have been cold-shouldered by banks.
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