Jet-Etihad

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Hey all. Hope everyone's doing great. :icflove: Here's another 'possible' scam in the making. The Jet Airways - Eitihad Airlines deal. Many would be aware that Eitihad has pledged to buy a minority stake in Jet Airways as well as nominate 3 out of 7 board members at Jet Airways. Naresh Goyal saab is frothing at the mouth, praising the synergy which will lead to lowers costs, offer his airline a lifeline and whatnot. So what then is the problem? On the surface it seems like much needed private equity into the Indian aviation sector, still reeling from the whole Kingfisher tamasha. In reality though, basically Naresh Goyal has colluded with Ajit Singh and other top notch ministers to sell India cheap. Etihad doses't really care so much about Jet. What they want is access into the lucrative civil aviation sector in India. What Eithad seeks to do it take Indians out of India, onward to Abu-Dhabi and then fly them to their outbound Destinations be they London or New York. To do this Etihad has unlimited access to every domestic airport in India. It's worth noting that this model was successfully incorporated by Dubai's 'Emirates' carrier.Emirates Airlines has already established Dubai as its hub point by operating more flights and carrying more passengers to and from India. More than 70% of the passengers carried by Emirates Airlines travel to points beyond Dubai, on Emirates’ network. Etihad is trying to emulate the same for Abu Dhabi with help from the Indian government. It's also worth reading the fine prints about this deal. Clause 2.1.6 states that: “Etihad shall source candidates for senior management positions within Jet and both parties shall second employees to each other’s businesses, as appropriate”. This clearly shows that Etihad would decide all senior management positions in Jet Airways, thereby, gaining effective management control and the right of the foreign airline to interfere in the management of the domestic carrier. There are other questionable clauses. Just because Etihad whilst paying a huge premium is buying a minority stake of Jet, doesn't mean it really is. The clauses prove that Jet has colluded with Etihad to mislead Indian investors as well as the Indian consumers which gave Naresh Goyal both fame and fortune. Further, the Clause 2.2.5 makes is mandatory for Jet to use Abu Dhabi as its exclusive hub to Africa, North and South America and the UAE. This means that Jet can only fly to these countries via Abu Dhabi and not directly from India and all this using Indian bilateral rights with those third countries. Do read up about it in the links I'm posting below and let's discuss :icflove::two_thumbs_up: http://www.moneylife.in/article/jet-etihad-deal-handing-over-benefits-to-abu-dhabi-on-a-platter/33469.html http://www.moneylife.in/article/exclusive-jet-etihad-deal-what-are-the-parliamentary-standing-committee-fipb-sebi-and-cci-worried-about/33462.html http://www.moneylife.in/article/exclusive-jet-etihad-deal-what-happened-in-those-48-hours/33443.html

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This is how ministers Ajit Singh and others sought to assist the deal in going through. It must be noted that our PM and the PMO have raised objections. Kudos to them. The minutes of the meeting held on 22 April 2013 under the chairmanship of P Chidambaram not only talks about the bilateral but also mentions third country code sharing and air service agreement. Here is the mandate approved for the bilateral air service negotiation between India and Abu Dhabi... 1. Additional entitlement up to 40,000 seats per week may be considered in addition to the current entitlement in a phased manner over next few years, preferably 3 to 5 years. 2. Third country code sharing [code sharing with designated airline of third country i.e. other than India & UAE (Abu Dhabi)] and domestic code sharing may be allowed. 3. Any other issue relating to air service agreement may also be considered in the overall interest of bilateral relationship. On the same day, the Group of Ministers, including Chidambaram, Ajit Singh, minister of civil aviation, Anand Sharma, minister of commerce and industries and Salman Khurshid, minister of external affairs, as well Shivshankar Menon, National Security Advisor and Pulok Chatterji, principal secretary briefed the prime minister. PM Manmohan Singh raised some objection on the bilateral, which was side-tracked after an assurance from Ajit Singh and commerce minister Sharma. The decision was then implemented within 48 hours, and on 24th April, the bilateral agreement between India and Abu Dhabi was signed. This was followed by signing of a deal between Jet and Etihad on the same day. So essential just to enable this deal to go through, the group of ministers amended the existing laws. Very fishy! Also worth noting, "The Parliamentary Committee also mentioned about Jet Airways selling three of its slots at London’s Heathrow Airport to Etihad, which was confirmed by the secretary of MCA. This was done without taking any permission from the Indian government. The Committee categorically said, “Carriers have no right to sell the bilateral allotted to them to other airlines that too a foreign airline. The Committee recommends that the government should take away the slots from Jet Airways and the airlines should be penalized for selling the national property—bilateral.â€