Jet Airways slips 3% on DGCA guidelines; stock has gained about 30% since March

NEW DELHI: Shares of Jet Airways Ltd which have been in some sort of momentum since March lost some bit of altitude in trade on Wednesday, on reports that DGCA made it clear that foreign airlines or investors would not have the right to control the management of an Indian carrier.

The aviation regulator has given effect to amendments in a rule relating to grant of flying permits to new airlines in the country, PTI quoted official sources in a report released on Tuesday.

The move could affect the Jet-Etihad deal or start-up carriers like Tata-SIA or AirAsia India, say experts.

The stock has which rallied over 30 per cent since March, slipped little over 3 per cent in trade as investor preferred to book some profits after sharp rally in the past month.

At 10:40 a.m.; Jet Airways was trading 3.1 per cent lower at Rs 281.95. It hit a low of Rs 281.30 and a high of Rs 292.40 in trade today.

The Directorate General of Civil Aviation (DGCA) has stipulated that a scheduled Indian airline cannot enter into an agreement with a foreign investing institution or a foreign airline which could give these foreign entities the right to control the management of the domestic operator.

Analysts feel that the latest revision to the Civil Aviation Requirement (CAR) could affect the fortunes of Etihad acquiring 24 per cent of stakes in Jet Airways for over Rs 2,400 crore, apart from the start-ups companies -- AirAsia India and Tata-Singapore Airlines, said a PTI report.

It has also made it clear that such foreign entities could have representation on the Board of Directors of the Indian airline company, but not more than one-third of the total number, the sources said.