Indian track record in protecting overseas investments, especially in the aviation sector, is a matter of concern for Etihad, say sources. The Gulf-based airline is currently in the process of carrying out due diligence for picking up a stake in Jet Airways.
To begin with, Etihad will have to clear Arab misgivings about India’s investment protection regime. With some past investments from the United Arab Emirates into India, including Etisalat, DP World and TAQA, running into difficulties, it is possible that Etihad wants to have a watertight case before investing in Jet Airways.
According to industry analysts, Etihad might be worried that if it were to invest in Jet and the Indian carrier ran into financial difficulties it would have repercussions for the Gulf carrier.These fears possibly stem from what is happening to another Indian carrier — Kingfisher Airlines. Though Kingfisher stopped operations in October last year, leasing companies are finding it difficult to take back the aircraft that they had leased out to the airline because entities like airport operators, who have also lent money to Kingfisher Airlines, want their debts to be cleared before allowing the aircraft to leave Indian shores.
22/02/13 Ashwini Phadnis/KR Srivats/Business Line
