Mumbai/Delhi: With the domestic aviation sector going through a tough phase, the Jet-Etihad deal is set to bring in new synergies in the sector, which will augur well for other Indian airline companies as well, according to aviation analysts.
The Foreign Investment Promotion Board (FIPB) on Monday gave a conditional approval to the Rs 2,058-crore Jet-Etihad deal.
As part of the deal, Jet Airways will sell 24 per cent stake to the Abu Dhabi-based Etihad Airways.
Kapil Kaul, CEO, Centre for Asia Pacific Aviation (CAPA), said: “The FIPB approval was on expected lines. This is the first major foreign direct investment (FDI) deal for aviation, which is significant for the sector.”
However, the very liberal and exclusive bilaterals granted was key to the valuation of the deal, he added. “The manner of allocating bilaterals reflects poorly on how we govern India’s aviation system. We see Etihad having a major role in Jet’s operations and management, even though the shareholding agreement has been revised. Earlier in 2008-09, W.L. Ross in SpiceJet had a very significant role in SpiceJet’s strategy and future direction, even with less than 15 per cent shareholding and one board seat,” Kaul said.
29/07/13 Business Line
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The Foreign Investment Promotion Board (FIPB) on Monday gave a conditional approval to the Rs 2,058-crore Jet-Etihad deal.
As part of the deal, Jet Airways will sell 24 per cent stake to the Abu Dhabi-based Etihad Airways.
Kapil Kaul, CEO, Centre for Asia Pacific Aviation (CAPA), said: “The FIPB approval was on expected lines. This is the first major foreign direct investment (FDI) deal for aviation, which is significant for the sector.”
However, the very liberal and exclusive bilaterals granted was key to the valuation of the deal, he added. “The manner of allocating bilaterals reflects poorly on how we govern India’s aviation system. We see Etihad having a major role in Jet’s operations and management, even though the shareholding agreement has been revised. Earlier in 2008-09, W.L. Ross in SpiceJet had a very significant role in SpiceJet’s strategy and future direction, even with less than 15 per cent shareholding and one board seat,” Kaul said.
29/07/13 Business Line
