Patel hits back at Jet charge: Policies not airline specific

Now, Jet says it does not hold govt responsible for failure of deal.

The government today dismissed Jet Airways' charge that its Rs 2,300 crore deal to acquire Air Sahara fell through due to delay in the government's merger and acquisition policy and clearances.

"Policies cannot be tailor-made to suit any particular airline. The policy that is broadly in place is based on the best international models," Union Civil Aviation Minister Praful Patel said in New Delhi today.

The merger and acquisition policy was finalised in May. "The government is not answerable to anyone. If someone is dissatisfied, we cannot be held responsible," the minister said.

Later in the day, Jet Airways said in a statement that it did not blame the government for the collapse of the deal. "Commercial deals are fashioned to respond to events, and they have to be factored in as commercial risks. Government policy, in evolving markets, is always a recognised commercial consideration and is generally dealt with in large deals. The deal was based on some assumptions, which were in turn made conditions precedent. Since they did not materialise, the deal lapsed. In such a situation, there is no occasion to blame anyone or any agency," the airline clarified.

The Jet Airways-Air Sahara deal had led to a division among airlines over the transfer of airport infrastructure rights. A few airlines like Kingfisher and Air Deccan wanted the government to take over Air Sahara's airport infrastructure and redistribute it among all other airlines.

They opposed trading of the entire infrastructure between the two airlines, saying that airport infrastructure was the property of the government or that of an airport operator.

Subsequently, the Aircraft Acquisition Committee of the civil aviation ministry considered the matter and recommended that rights over the entire infrastructure of an airline could be exercised by the airline that takes over the aircraft.

For all other rights, the terms of lease or sale agreement between the airport operator and the airline would apply, the committee had recommended.