It is no coincidence that the stake-sale deal between Jet Airways and Etihad was announced on the very day India and the United Arab Emirates signed a bilateral agreement raising the number of weekly seats between the two countries to 50,000 for each – almost four times the current 13,300.
“Its a great deal for Jet Airways and Etihad. Jet will now have adequate capital and a source for future capital needed for expansion at low interest rates. On the other hand, Eithad will get a strong foothold in the Indian market,” said Saroj Datta, aviation expert and ex-Jet Airways official. “However, we will have to wait and watch if the deal actually helps in the growth of passenger traffic and what impact it has on competition.”
The deal could well help Jet wrest back leadership in the domestic market, which it had surrendered to IndiGo last year. In February, IndiGo continued to be the largest airline with a 27.4% marketshare, followed by Jet Airways group (including Jet Konnect) at 25.4%, SpiceJet at 20.4%, Air India (18.9%), and GoAir (7.8%), as per data provided by the Directorate General of Civil Aviation.
“With Jet Airways coming into picture, Etihad will have additional 10-15 lakh passengers coming to its Abu Dhabi hub,” said an analyst.
Just ahead of the deal, Jet had sought an additional 41,600 seats a week to Abu Dhabi by the summer of fiscal 2016 from the current 13,300 seats. But it may now have to cut down its international ambitions, said an analyst.
25/04/13 Yuga Chaudhari/Daily News & Analysis
