In a move that could generate more controversy for the proposed Jet Airways-Etihad deal, Air India has written to the Ministry of Civil Aviation saying that allowing the deal to go through could affect the overall complexion of international air passenger flow to and from India.
Government sources told Business Line that while the letter does not mention Etihad by name, it does point out that if the West Asian carrier picks up a majority stake in Jet Airways, most of the decisions about Jet’s future plans are likely to be driven by the foreign carrier.
Air India’s communication adds that allowing the deal in the current shape could also have an adverse impact on Air India’s prospects as the airline currently operates non-stop flights from India to London, Paris and Frankfurt. In November last year, the Government permitted Air India to operate daily flights from Delhi to Rome-Madrid-Barcelona and Moscow while from winter schedule 2013, the Maharaja has been allowed to launch daily flights between Mumbai and Nairobi.
The exact contours of the deal between Jet and Etihad are still being worked out although it is expected that the foreign carrier will initially pick up a 24 per cent stake. The eventual stake sale could see Etihad getting a majority stake in the Indian airline. Ending months of speculation about the deal, on January 3, Jet Airways had informed the Bombay Stock Exchange that Jet and Etihad were in discussions regarding a potential investment.
Panel set up
Following Air India’s letter, the Ministry has set up a committee to examine the matter. Being the nodal agency for civil aviation, the Ministry’s views could affect the prospects of the deal, analysts feel.
On Monday, the Jet Airways stock closed at Rs 596.55 or 0.11 per cent lower on the BSE.
ashwini.phadnis@thehindu.co.in
Comments:
GoI needs to protect the Indian skies by these subtle moves for takeover. Goyal had equity investment from Gulf Air earlier whose former head is the head of Etihad. By doing so , India would lose the biggest private flag carrier that it has in Jet as under the laws of certain countries like US, airlines need to be owned and controlled by the nationality of the flag carrier . What is the use in killing our own airlines just to get a few billion dollars that would anyway go to the kitty of unutilised forex in the treasury ! Please maintain status quo which means allow any minor shareholding by foreigners as long as they are not from the airline industry / competition .
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