New Delhi, Jan. 14:
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
alarm BEEPS Air India concerned over allowing foreign direct investments
in domestic airlines Its letter points out that after the Jet-Etihad deal,
though substantial ownership will remain with Indians, equity participation by
Etihad will drive the airline’s future growth Air India is worried that the
deal could alter overall complexion of foreign passenger flow thereby affecting
its prospects
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