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Fri 5 Jul 2013 11:58 AM

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Indian min threatens to quit over Etihad-Jet deal

Sources say Ajit Singh has accused the Prime Minister’s office of blocking deal - report

Indian min threatens to quit over Etihad-Jet deal

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.

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Dasa 7 years ago

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

Minaka 7 years ago

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!

Sundar 7 years ago

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.

mumeen 7 years ago

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.

Calvin 7 years ago

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.

pascal 7 years ago

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.