Qatar Airways Denies Interest in India’s SpiceJet

Gulf carrier, Qatar Airways, has once again been forced to deny it is interested in acquiring a stake in independent Indian carrier SpiceJet, just two and a half years after previous rumours had serviced that it was in talks to develop a marketing partnership.

Gulf carrier, Qatar Airways, has once again been forced to deny it is interested in acquiring a stake in independent Indian carrier SpiceJet, just two and a half years after previous rumours had serviced that it was in talks to develop a marketing partnership. This week’s statement from the airline follows a report from Bloomberg TV India on July 24, 2015 that it was holding exploratory discussions with SpiceJet to pick up a substantial stake in the low-cost Indian carrier.

In the statement Qatar Airways refuted the media reports: “This release is to confirm that Qatar Airways is not in talks to pursue a commercial stake in SpiceJet.” It stated that there was “no interest” on its behalf to engage in a partnership with the carrier and described the media report as “an inaccurate claim”. However, it confirmed that it is looking at development opportunities in India, but “the only airline” it is talking to is Indigo.

Qatar Airways presently does not have any form of interline agreement with SpiceJet, which is the simplest form of relations between any two airlines, and it said it “is not planning to pursue any form of arrangement” in the future.

This is not the first time that erroneous media claims have been made over Qatar Airways’ possible interest in the Indian carrier. Similar news was released in January 2013, and the Qatar Airways statement said this “appears to be a tactic to increase market and share value”.

After the original report was published last week and subsequently disseminated by the world’s media SpiceJet’s share price rose by as much as six per cent. “These stake sale comments are unfounded and are believed to be deliberately spread to influence share valuations,” said Qatar Airways in its statement.

The story is based on the general interest from Qatar Airways to expand its presence in the Indian market to better compete with its regional hub rivals Emirates Airline and Etihad Airways. The latter has already acquired a minority interest in India’s Jet Airways and while Qatar Airways has publicly stated it has held discussions with IndiGo, the reports had suggested informal talks had and were continuing with SpiceJet.

The initial report had said talks between Qatar Airways and SpiceJet had first taken place in March and a second meeting happened recently with an unnamed SpiceJet executive quoted as saying: "Talks were held recently and consensus was achieved on an interline arrangement. It was decided to resume discussions after the Eid holidays and talks will resume again in a week's time."

There is a significant market for travel between India and the Middle East and onward to the likes of Africa, Europe and the Americas. In the first quarter of 2015 an estimated five million passengers flew in and out of India from and to the Middle East with bi-directional with flows of around 1.7 million passengers to/from Europe, almost 400,000 passengers to Africa and 1.6 million to the Americas.

According to our analysis of Sabre Airport Data Intelligence statistics, Qatar Airways currently accounts for just a 3.7 per cent share of international passenger demand between India and the Middle East, versus the 11.9 per cent and 4.3 per cent shares of Emirates Airline and Etihad Airways, respectively – the Etihad share rises to 19.7 per cent when you also include the activities of its equity partner Jet Airways.

Qatar Airways currently links its Hamad International Airport hub in Doha with 12 destinations in India: Ahmedabad, Amritsar, Bangalore, Chennai, Delhi, Goa, Hyderabad, Kochi, Kolkata, Kozhikode, Mumbai and Thiruvananthapuram.

Between 2005 and 2014 it almost quadrupled its capacity into the country with a 296.8 per cent growth in seats, an average annual rise of 33.0 per cent. After double-digit growth between 2007 and 2011 the rate reduced to 5.3 per cent in 2012, 6.3 per cent in 2013, 6.3 per cent in 2014 and based on published schedules by just 1.9 per cent, the lowest rate of growth for more than a decade.