CCI to hold discussions with stakeholders on Jet-Etihad deal

Air India may raise a red flag maintaining that Jet and Etihad would hold a dominant position on the India-Abu Dhabi route

Fair trade watchdog Competition Commission of India would take a final view on the Rs 2,058 crore Jet-Etihad deal only after holding further discussions with all stakeholders, including Jet's prime competitor Air India. With the CCI seeking view of stakeholders, Air India is likely to raise a red flag maintaining that Jet Airways and Etihad Airways would hold a dominant position on the India-Abu Dhabi route if the deal was cleared and would distort the market. However, Jet is understood to have prepared itself to disprove this claim before the CCI.

As per the latest bilateral air services agreement, out of 24,300 seats per week to be operated between the two countries, Jet has been allocated 9,464 seats or 39% and Air India 9,171 or 38%. Currently, the India-Abu Dhabi market size is less than one million passengers out of a total of 6.8 million between India and the entire United Arab Emirates.

The combined Jet- Etihad market share for India-UAE stood at 15.6%. Official sources said before considering the Jet-Etihad deal for clearance, the CCI would consider all the views put forth by stakeholders like other Indian airlines and airport operators.

The deal, under which Etihad would buy out 24% stake in Jet, has already been cleared by the Securities and Exchange Board of India (SEBI) and the Cabinet Committee on Economic Affairs (CCEA). The CCI's nod is crucial. It is so far the single-largest FDI in Indian aviation sector.