Indian min threatens to quit over Etihad-Jet deal

By Shane McGinley
  • Friday, 5 July 2013 11:58 AM
  • Share via facebook
  • Tweet this
  • Bookmark and Share

India’s civil aviation minister has threatened to resign and has accused the Prime Minister’s office of blocking Abu Dhabi-backed Etihad’s bid to buy 24 percent of Indian carrier Jet Airways, it has been reported.

Sources told the Daily Mail newspaper Civil Aviation Minister Ajit Singh was threatening to quit the government over attempts to stall the $379m Etihad deal.

"I don't see a problem in the Abu Dhabi deal going through. Ask the Prime Minister's Office if the deal is on hold despite being signed," Singh was quoted as saying.

Singh has been a positive force behind the deal by Abu Dhabi’s Etihad Airways to buy a 24 stake in Jet Airways, announced in April and currently awaiting regulatory approval.

The deal has proved controversial and objections were raised by a Parliamentary Standing Committee headed by MP Sitaram Yechury. At the same time, several MPS have also sent a letter of objection to Indian Prime Minister Manmohan Singh.

The MPs are said to be concerned over a Bilateral Air Services Agreement between the UAE and India, which gives Emirati airlines an additional 36,000 seats on Indian routes and which was announced the same day as the Etihad stake sale.

Jet Airways, controlled by Indian businessman Naresh Goyal, said its net loss widened to 4.96 billion rupees ($89m) for its fiscal fourth-quarter ended March, from 2.98 billion rupees reported a year earlier.

However, it claimed that its planned deal with Etihad would bring "immediate revenue growth and cost synergy opportunities" and help strengthen its balance sheet.

Etihad's investment in Jet is the first by an overseas operator in an Indian airline since ownership rules were relaxed and provides Jet with a deep-pocketed global partner as well as cash to retire debt.

Related:

Stories

Indian regulator defers Etihad-Jet approval talks

Etihad-backed Jet says CEO has stepped down

Etihad-linked Jet hires ex-Air New Zealand CEO

Abu Dhabi 'offered $50bn deal for India traffic rights'

Galleries
REVEALED: Top 10 most-on time international airlines

REVEALED: Top 10 most-on time international airlines

Topics

Transport

Companies

Etihad Airways

Jet Airways

Also in Transport

Etihad launches social media travel tips campaign

Abu Dhabi Int'l posts 15.1% rise in passengers in Q1

Also in UAE

Dubai's Arabtec showcases $3.8bn worth of projects

Video: Burj Khalifa sets world record for highest base jump

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: mumeen Sunday, 7 July 2013 10:20 AM[UAE] - kuwait

Gone are the old days of protective indian economic stances. As a global player india must be part of free market and competition. PM/s office needn't be involved in foreign investments. Foreign investments should be welcome. Otherwise, like AI, 9W (jet airways) will also go down the drain like several other indian carriers.

Posted by: pascal Wednesday, 10 July 2013 8:51 AM[UAE] - India

how can u quote AI,are you aware of the causes for its position today.Foreign investments are welcome but not on the cost of others.Like jet there are many pvt carriers,what will be bestowed on their turn.India should take decisions on interest of Indians not on others.

Reply to this comment.

Posted by: Sundar Saturday, 6 July 2013 5:22 PM[UAE] - India

How could you say that AI is a disgrace to Indians? This aviation minister (or for that matter his predecessors) has not taken any step to bring up AI and he has no interest to do so.

Yes, because by promoting AI, no politician is going to get any kickback.

Posted by: Calvin Monday, 8 July 2013 9:43 AM[UAE] - India

The support and angst for the deal is debatable and a double-edged sword. In one way, giving Etihad the kind of freebies it could gain from the deal could give rise to a monopoly. On the other hand, AI is nothing but a spoiled worthless brat in the aviation sector. It nothing but a black hole for the local populace whose taxes go to waste supporting an airline that has messed the aviation sector receiving the kickbacks it get from the government.

Reply to this comment.

Posted by: Dasa Friday, 5 July 2013 5:58 PM[UAE] - India

Yes, the PMO office is right, and the deal should not be ratified. If approved, it will kill Air India and Etihad with Emirates (both UAE airlines) will clean Indian aviation market. Why should the minister support one airline only at the expense of the national carrier, and the whole thing smells

Posted by: Minaka Saturday, 6 July 2013 12:40 PM[UAE] - UAE

Why support a national carrier that is good for nothing??!! Air India is a disgrace to us Indians! High time they pull their socks up & work to international standards. Or else shut shop & make way for more professional airlines!

Reply to this comment.

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Get E-Mail Alerts
Get E-Mail Alerts
Get E-Mail Alerts

Arabian Business Power 500 2013 - Top 5 from Banking & Finance »

Prince Alwaleed Bin Talal Al Saud  Ahmad Al Sayed  Abbas Zuaiter  Khaldoon Al Mubarak  Mohammed El Erian 
View complete list
Features & Analysis
Cracking the code

Cracking the code

Strategic codeshare agreements are a win-win situation for gulf...

Stronger together? Reviewing Emirates' historic partnership with Qantas

Stronger together? Reviewing Emirates' historic partnership with Qantas

One year after the “historic” Emirates-Qantas partnership deal...

Air Arabia to use tried and tested model in Ras Al Khaimah

Air Arabia to use tried and tested model in Ras Al Khaimah

Air Arabia signed an agreement last month to become the official...

Most Popular
Most Discussed
Read all user comments »
Read all user comments »
Read all user comments »