Tuesday, August 13, 2013

Why Jet-Etihad delay will not hamper FDI in other airlines

Much before the Indian government allowed 49 percent foreign direct investment (FDI) in domestic carriers, global airlines like British Airways, Eithad and Lufthansa had evinced interest to invest in Indian market.
But finally, when FDI in aviation became a reality, global biggies switched to ‘wait-and-watch mode’ except for Abu-Dhabi’s Etihad which already had a strong connect with Jet Air and its chairman Naresh Goyal.
After months of negotiation, Etihad picked up 24 percent stake in Jet Airways in April this year, but the deal is yet to get all the regulatory approvals.
Since the day the deal was announced, there was confusion about whether chairman Naresh Goyal’s NRI status should also be counted in the 49 percent FDI cap for investments. Now that the government has clarified that Goyal’s NRI status should not come in the way of the deal, it will now not take much time, say most analysts.
13/08/13 Shaheen Mansuri/Moneycontrol.com