NEW DELHI: The deal between Jet AirwaysBSE 1.91 % and Gulf carrier Etihad Airways is unlikely to bring immediate benefits for the foreign partner after it picks up a minority stake or 24% equity in the Indian airline, say people in the government and the industry.
It will only be in due course of time, say aviationanalysts, that the strategic tie-up will help increase Indian traffic feed to Abu Dhabi as well as raise the number of foreign passengers coming into India for onward travel to nearby countries.
"As of financial year 2011, 2.68 million Indian fliers chose Emirates (Dubai) to fly abroad, 0.85 million travelled with Qatar Airways (through Doha) and 0.41 million flew Etihad. Basically, this is the gap that Etihad would like to fill up in due course of time as a combine with Jet," consultancy firm Auctus Advisors MD Manish Chheda said.
This would also help Jet Airways bring foreign passengers to India and take them to other countries, he added.
The 24% fresh equity stake sale, which Etihad is said to be buying in the Naresh-Goyal owned airline for around 1,600 crore, does not give it voting rights to veto company resolutions, which an investor gets only on picking up 26% stake. It would only give the Abu Dhabi carrier board representation.
In the backdrop of a meeting between the Etihad management and civil aviation minister Ajit Singh, the government will make it clear that the deal doesn't give any automatic benefits to the Gulf carrier, not even code-sharing for that matter.
"It changes nothing in our eyes. The Jet-Etihad combined entity will operate as an India registered or domestic airline, while Etihad will be allowed 11 ports of call in India with as many seats per week as the Air Services Agreement (ASA) permits between India and the UAE," a senior government official from the ministry of civil aviation told ET.
The airlines will have to take government permission for adding more Indian routes, like they always did, the official added. "The same holds for Jet Airways for increasing frequencies to Abu Dhabi."
http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/-jet-deal-may-not-automatically-increase-etihads-reach-into-indian-cities/articleshow/18269854.cms
No comments:
Post a Comment