CCI to examine Jet-Etihad deal but unlikely to throw a spanner

The Competition Commission of India will examine the stake deal between Jet Airways and Abu Dhabi’s Etihad Airways, according to a report in the Times of India today.

The deal is the first in the domestic aviation sector after the government allowed foreign airlines to pick up 49 percent in their Indian peers.

The CCI, whose Chairman Ashok Chawla was a former aviation secretary, will explore whether the deal will be detrimental to other players in the sector.

[caption id=“attachment_763229” align=“alignleft” width=“380”] Indian airlines use only about 65 percent of the existing entitlements in the sector. Flickr Images/Debarka Banik[/caption]

The deal has kicked up a controversy as the government’s move increasing the seat capacity in the India-Abu Dhabi sector is seen as favouring only Jet and Etihad at the cost of Air India.

Indian airlines use only about 65 percent of the existing entitlements in the sector.

According to reports, domestic players expect Jet to gain substantial benefit from such a massive increase in flying rights to Abu Dhabi as it can now carry passengers from small towns and cities in India to Abu Dhabi and fly them onwards to Europe and Americas through Etihad.This will deny Indian airlines a share of this lucrative traffic.

Firstpost had yesterday reported that a Parliamentary Standing Committee headed by Sitaram Yechury has suggested that the increased flying rights be kept in abeyance till Indian airlines have enough muscle and capacity to compete with the likes of Etihad.

However, this is unlikely to prompt CCI to object to the deal. And as far as Parliamentary panel’s objections are concerned, as Firstpost had earlier argued, no one in the Ministry of Civil Aviation is expected to pay heed to this sane advice.