(MENAFN- The Peninsula) Qatar Airways (QA) is in 'exploratory talks' with India's SpiceJet to pick up a substantial stake in the low-cost Indian carrier.
QA is willing to buy up to 49 percent, the maximum allowed by India's FDI rules for foreign firms in domestic airliners.
However, SpiceJet is not keen to offload 49 percent at present, a section of Indian media reported yesterday.
According to Bloomberg TV India, SpiceJet sources confirmed that it is in "exploratory talks" with QA but refused to give details saying the company is scheduled to come out with Q1 financial results next week and hence it can't comment on speculative aspect of business.
However, the report said QA did not respond to a query emailed by Bloomberg TV India.
"The civil aviation ministry will firm up its views on a possible deal between SpiceJet and the Gulf-based airliner.
"The government's view is crucial to an eventual SpiceJet-Qatar Airways transaction," Bloomberg quoted an official familiar with the development as saying.
India's most reputed financial daily The Economic Times reported that SpiceJet and QA are in early stage talks to negotiate a commercial agreement that could eventually lead to the Gulf carrier picking up a stake in the Indian airline.
If a deal takes place, it will be the second in recent years after Etihad Airways picked up a 24 percent stake in Jet Airways.
Negotiations will initially involve SpiceJet signing an interline agreement with QA, making Doha its international hub and funnelling passengers originating from India through to the Gulf carrier.
QA has been looking to expand its presence in India as it lags behind Emirates and Etihad.
SpiceJet is keen to use Doha as an intermediate point to expand into regions where it cannot fly nonstop with its Boeing 737s.
"Talks were held recently and a consensus was achieved on an interline arrangement," said a SpiceJet executive who did not want to be identified.
"It was decided to resume discussions after the Eid holidays and talks will resume again in a week's time," the Indian daily quoted sources as saying.
A stake purchase could lead to SpiceJet, emerging from a crisis stemming from a cash crunch, getting easy access to slots at Hamad International Airport, said a source.
Places such as Istanbul, Cairo, Amman, Najaf, Erbil and others are of key interest to SpiceJet where a stop in Doha would ensure seamless transfer of passengers from various points in India to these destinations via Doha.
Talks between QA and SpiceJet first took place in March and a second meeting happened recently.
There was no response to an email sent to QA. A SpiceJet spokesperson did not comment on the matter, the daily reported.
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