Jet Airways flies over 7% on CCI nod to Jet-Etihad deal

NEW DELHI: Jet Airways Ltd surged as much as 7.08 per cent in morning trade on Wednesday, after the competition watchdog approved Etihad Airways’ investment in Jet Airways, marking the final clearance to the first-ever investment by a foreign airline in an Indian carrier.

At 10:15 a.m.; Jet Airways pared some of the morning gains and was trading 3.4 per cent higher at Rs 342.25. It has hit a low of Rs 341.80 and a high of Rs 354.40 in trade today.

The government had last year allowed foreign airlines to buy up to 49 per cent in Indian airlines.

Abu Dhabi-based Etihad will acquire 24 per cent stake in Jet Airways for $600 million that also includes a soft loan following the CCI clearance. “The Commission approves the deal under sub-section (1) of Section 31 of the Act,” says the order released late Tuesday evening.

Five members including chairman Ashok Chawla voted to clear the deal. One member, Anurag Goel, voted no on the ground that competition will be hit ET reported. The approval is because of the commission’s finding that the Jet-Etihad combination is not likely to significantly competition.

The 23-page order argues that after the controversial revision in the Bilateral Air-Services Agreement (BASA) between India and United Arab Emirates (UAE) would not significantly impact competition.

According to the ET report, the total seat distribution to Jet and Etihad increases from 17.06 per cent to 22 per cent as a result of the agreement but the commission says that it is “unlikely that this market power will be exploited.”