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Explained: Why Qatar is an unlikely suitor for Jet Airways

While Etihad is seeking an exit from Jet, a negotiation between Qatar Airways and Etihad looks impossible given strained relations between the two Gulf nations

Aneesh Phadnis  |  Mumbai 

Jet Airways

is unlikely to bail out at this stage in the backdrop of geopolitical tensions in West Asia and uncertainty over the grant of additional traffic rights to the country, say aviation experts.

According to a media report, chairman and his son Nivaan gave a presentation to the management this week following the collapse of negotiations with its strategic partner Airways. Neither nor have confirmed or denied the meeting.

In January, however, Qatar Airways group chief executive officer Akbar Al Baker ruled out investing in Jet till continued to own a stake in the airline. "We would definitely look at it (Jet Airways) if a 24 per cent stake was not held by How can I take a stake in an airline which is owned by our adversary," Al Baker had said.

While Etihad is seeking an exit from Jet, a negotiation between Qatar Airways and Etihad looks impossible given strained relations between the two Gulf nations. Also Jet needs immediate funding and any new investor would seek due diligence before committing funds.

"We don't see Qatar Airways investing in Jet at this stage," said Kapil Kaul, South Asia CEO of aviation consultancy CAPA.

Qatar has a long-pending demand for an increase in traffic rights and experts believe it may not be interested in Jet unless it gets additional seats. Qatar Airways has lamented that both UAE and Oman have secured additional rights from India but its own demand is pending. In 2017 it sought an additional 42,000 weekly seats over the current entitlement of around 24,000 seats. It has also been looking to start an airline in India as a part of its expansion efforts but kept its plans on hold as rules were not conducive for investment, it had said in September 2018.

The grant of traffic rights to countries in West Asia is highly contentious and the government is already facing a legal challenge in Supreme Court over its decision to increase seat entitlement for Abu Dhabi. Even if the government decides to grant extra rights to Qatar it would have to wait till the election code of conduct lapses in May.

"Currently there is no discussion on giving additional seats to Qatar. There can be no memorandum of understanding to grant additional traffic rights when a code of conduct is in place," said a government official.

The increase with traffic rights coincided with Etihad's investment in Jet Airways and both the deal between India and UAE for traffic rights and investment in Jet occurred on the same day.

"Jet Airways abetted the grabbing of Air India's lucrative airspace between India and UAE to compensate Abu Dhabi for loss arising from my PIL cancelling the 2G spectrum licence to Etislat," Rajya Sabha MP Subramanian Swamy tweeted today.

First Published: Wed, March 20 2019. 14:47 IST
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