ibnlive » Business

Jul 02, 2013 at 03:31pm IST

Big questions and pointers of the Jet-Etihad deal

New Delhi: The deal between Jet Airways and Etihad seems to have hit a fresh roadblock with the government divided on the domestic airlines' 24 per cent stake sale to the Abu Dhabi-based carrier. The Prime Minister's Office has asked Civil Aviation Ministry to allay concerns over the deal and has instructed the Cabinet Secretary to hold a meeting to discuss the stake sale.

The big questions surrounding the deal:

ALSO SEE Crucial meet today as govt split over Jet-Etihad deal, Jet stock plunges

1. Why were bilateral weekly seats between Abu Dhabi and New Delhi increased?

Big questions and pointers of the Jet-Etihad deal

PMO has asked Aviation Ministry to allay concerns over the deal and has instructed the Cabinet Secretary to hold a meeting to discuss the same.

2. Is the dramatic increase in weekly seats a sweetener?

3. Are security worries raised by critics genuine or just reasons to derail the deal?

4. Is the PMO worried that giving into Jet-Etihad deal will create a 2G like row?

5. Did Civil Aviation Minister Ajit Singh push through the deal with undue haste?

6. Why is PMO suddenly raising concerns over the deal two months after it was inked?

7. Where does the PMO note leave the GoM headed by Finance Minister P Chidambaram?

8. Will U-turn on the deal hit the FDI climate more adversely?

Repercussions of the Jet-Etihad deal getting scrapped:

1. Jet-Etihad MoU has already been signed; going back may lead to legal hassles.

2. Delay may lead to Etihad walking out of deal.

3. Failure of Jet-Etihad deal could spook other foreign investors

4. After PM's nod for MoU, Cabinet Committee on Economic Affairs approval is not required and its approval will delay the process further.

5. Ministers unhappy with PMO note on Jet-Etihad deal will want explanation.

Highlights of the deal:

1. It is the largest FDI proposed in Indian aviation with a value of Rs 2058 crore.

2. 24 per cent equity to be sold by Jet Airway to Etihad Airway.

3. $379 million value of Jet equity to be sold.

4. 27.26 million shares of Jet Airways to be sold to Etihad at Rs 754.74 apiece.

5. Etihad is the national airline of the UAE with a fleet of 66 aircraft and a network of 84 detinations.

  • 3
  • 4
  • 0

Latest