IndiGo, Qatar Airways to announce strategic deal

NEW DELHI (Reuters) – India’s largest airline, IndiGo and Qatar Airways will make a strategic business announcement on Thursday, which media reports said would involve a codeshare agreement.

IndiGo shares, which rose as much as 5% early in the day, pared those gains to trade up 1% in the afternoon.

Qatar has in the past shown interest in investing in IndiGo but the Indian airline has resisted.

“We are very interested in IndiGo … We are talking to IndiGo of doing codeshare, joint flights but not yet an equity stake in the airline,” Qatar Airways chief executive, Akbar Al Baker, told Reuters in an interview in August.

Al Baker said they had talked to IndiGo but the airline was “not yet ready to take a foreign investor”. When it is ready, Qatar would be interested, he had said at the time.

Television news channels, citing other agencies, said on Tuesday Qatar Airways was not looking at a stake purchase in IndiGo.

Any deal, however, would come at a time when IndiGo’s two co-founders, Rakesh Gangwal and Rahul Bhatia, have been embroiled in a dispute about corporate governance of the airline, sparking concern among investors it could have an impact on the airline’s valuation and strategy.

IndiGo, which has about 40% share of the domestic Indian market, is planning an aggressive push into more international destinations.

The airline’s chief executive, Ronojoy Dutta, and al Baker would “talk about the vision and future for both the airlines”, they said in the statement.

Last week, IndiGo placed a historic order for 300 Airbus (AIR.PA) A320neo family planes, including the newest jet, a long-range version of the single-aisle A320neo family called the A321XLR.

IndiGo flies to 60 international destinations including Turkey, China, Vietnam, Myanmar and Saudi Arabia, which it added this year.