Jet-Etihad deal mired by politics, says aviation minister Ajit Singh
10 July 2013
Giving no indication of an early end to the regulatory imbroglio in which the Jet-Etihad deal is stuck, civil aviation minister Ajit Singh says the deal for Etihad Airways to buy a stake in India's Jet Airways will only go through if both airlines comply with all regulatory requirements.
Singh clarified that there was nothing wrong in Etihad picking up stake in the Indian carrier and the delay is due to political differences. He further said that he was confident about Jet-Etihad satisfying the regulators.
Abu Dhabi's Etihad had picked up a 24-per cent stake in Jet Airways in April under the new liberalised policy for foreign investment in Indian carriers; the deal was supposed to be one of the first under the new FDI rules. But since then the deal is mired in a political and regulatory bog, and this is hardly sending the best signals to other investors in the sector.
Jet Airways and Abu Dhabi's Etihad will have to make required changes in the agreement as stipulated by the Securities & Exchange Board of India (SEBI) and the Foreign Investment Promotion Board (FIPB), said Singh in a Tuesday night interview to CNBC-TV18.
Rubbishing claims about the deal being a security threat, Singh said he sees no security threat in Etihad picking up stake in the Indian carrier.
On the opposition-raised controversy about the ministry granting undue flying rights to the United Arab Emirates just before the deal was announced, Singh defended the move saying the decision to hike the number of UAE seats on the sector was based on recommendations of an inter-ministerial group which considered the overall economic interests of the country.
Increasing bilateral aviation ties with the Emirates is not meant to favour Etihad, which has flying into India for years, but it is based on factors like improved passenger traffic on the route, he said.
He added that he would take the bilateral agreement discussion to the cabinet in next 15 days.