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The Prime Minister's Office today denied reports that the government was divided over India- UAE (Abu Dhabi) Bilateral Air Services Agreement and on Jet Airways-Etihad equity sales proposal and accused the media of spreading baseless and incorrect reports
“There is absolutely no disagreement within the government or between the Ministers and Prime Minister on the matter. The Prime Minister is neither washing his hands off the Bilateral Air Services Agreement nor is the Prime Minister's Office trying to do a U-turn on the issue now”, the PMO said in a statement.
It clarified that the enhancement of seat entitlements under the India-UAE Bilateral Air Services Agreement and the equity sales proposal between Jet Airways and Etihad Airways are “distinct issues and between different categories of entities” and “need to be handled separately without mixing them up”.
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While conceding that this is a matter between private parties which needs to be approved by the concerned agencies as per the policies and laws in place, the government affirmed that there is no question of either backtracking from or disowning this proposal as this is not an agreement with the government.
Separately, addressing concerns raised by sections of politicians over alleged collusion between government officials and the management of the two airlines, civil aviation minister Ajit Singh strongly stated that no uneven benefits were meted out to the West Asian carrier to clinch the Rs 2058 crore deal for the Jet Airways.
“There are no un even benefits in the Abu Dhabi bilateral. The issue is, it's a political thing. Basically elections are coming. They have been attacking day in and day out, this minister and that minister. But I wished that they had checked their fact. In terms of FDI, it is bigger than any other deal this year. There are so many dimensions to it. Those opposing the deal are long on politics and short on facts”, said Singh.
The United Arab Emirates-based Etihad Airways on April 24 agreed to buy a 24% stake in Jet for $ 379 million on the same day the Indian government offered increased traffic rights to Abu Dhabi. India agreed to approve an unprecedented 36,670 weekly seats between India and Abu Dhabi which analysts say would indirectly benefit Jet Airways.
Senior BJP leader Jawant Singh, a parliamentary committee led by Communist Party of India (Marxist) leader Sitaram Yechury, and Janata Party chief Subramanian Swamy have objected to the manner in which traffic rights were granted to Abu Dhabi stating that it would harm interests of the national carrier Air India and of airport operators in the country. Senior political leaders have shot off letters to the Prime Minister’s Office, which then referred these concerns in a communication to Civil Aviation, Commerce and Finance Ministries.
Singh countered allegations of virtual sell-out made by MPs saying that when the bilateral air services agreement with the UAE was inked in 2007-08, both sides agreed to enhance air traffic rights for flying 29,000 seats from 18,000. Later, an additional 29,000 seats were granted to UAE. "We gave them additional cities (in India) when Indian carriers were using much less. Swamy was around then. Jaswant Singh was around then, Yechury too was around ...(Jaswant) Singh has a problem. But we are following the same rules that existed when he was the Defence Minister," he added.
Regarding the bilateral air services agreement between India and Abu Dhabi, Singh said while Indian carriers had asked for additional 55,000 seats, Abu Dhabi had sought 45,000 seats. The ministry granted 36,700 seats, staggered over three years. The Abu Dhabi bilateral agreement will additionally allow Indian carriers to operate onward services from the emirate. Such a provision was not present in traffic right agreements signed few years back and Singh's contention is that while on foreign airlines benefitted from traffic rights allocation in the past both Abu Dhabi and Indian airlines benefit now.
Singh clarified that Jet Airways would have to clear all regulatory hurdles and satisfy concerns raised by the Foreign Investment Promotion Board (FIPB), SEBI and CCI. “We have also sought and received some clarifications on issues of control and place of business but have not given them anything yet”, he said.
