Indian Politics To Spare Etihad-Jet Deal, Says Etihad CEO
Monday, 5th May 2014 at 03:45am
James Hogan, the Chief Executive Officer of the Abu Dahbi-based Etihad Airways, is optimistic that his airline's stake purchase in Jet Airways won't get affected by the change of government.
Speculations have it that the deal between Jet Airways and Etihad will be in danger of being declared illegal if the BJP (Bhartiya Janata Party) wins the general elections this month.
In November last year, Etihad sealed the deal with Jet enabling the former to purchase a 24% stake in the Indian carrier. The deal went through a series of regulatory review over the course of its process making it a legal transaction.
But BJP, the present government's staunch opponents, has seen a different picture in the stake purchase by the Gulf-based airline stating that it is not the best interest of the country. The party threatened that if it gets elected, it will declare the deal null and void.
The Etihad CEO, however, argued that the deal was legal and that they followed all legal procedures based on the country's aviation law and that they didn't violate any law for that matter.
The partnership between Jet and Etihad came after the country relaxed its obsolete aviation law particularly the FDI policy which was considered hindrance to the industry's development. Prior to the amendment of the FDI policy, foreign investors were only allowed up to 24% of the total shares of any airline joint venture or partnership.
Hogan himself admitted that the purchase was a significant move by Etihad as Jet badly needed capital infusion to curb its mounting losses and pay off debts.
The deal marked as the beginning of more airline joint ventures involving local carriers and foreign-base airlines.
By: Pete Lee.