Against the backdrop of objections by some MPs, civil aviation minister Ajit Singh strongly defended the `2,050-crore Jet-Etihad deal, saying those opposing it were “long on politics and short on facts”.
“It is such an important deal... the first big deal in civil aviation ministry. 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,” Mr Singh said. “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 facts,” Mr Singh added.
Meanwhile, the PMO also revealed that the Prime Minister in April this year had asked the finance minister to hold a meeting with the external affairs, commerce and civil aviation ministers wherein these ministers decided that an additional entitlement of 40,000 seats per week be considered with the UAE. These ministers also met the PM on April 22 where the decision to give the in-principle approval as per the decided formulation was taken.
However, the PMO had then mentioned several concerns raised by various quarters to these ministers. The PMO had said “it is likely that private airport operators would not be supportive of this enhancement as they have invested substantial amounts in the airports at Delhi, Mumbai, Bangalore and Hyderabad and would like these to develop as hubs for air traffic”. The PMO had also said “one of the effects of this enhancement would be that long-distance traffic from India to Europe/North America would be diverted to Abu Dhabi”. Importantly, the PMO also said there is a possibility that if an Abu-Dhabi based airline “acquires” Jet Airways, this entity would control the bulk of the seats on this route. The PMO added that other countries may make similar requests and therefore advised that a “calibrated approach may be necessary”. It was also pointed out that the finance ministry’s Department of Economic Affairs had reservations in the past on the enhancement.
However, the commerce minister had maintained that Abu Dhabi has one of the largest “Sovereign Wealth Funds” in the world and that it was in India’s interests to attract these funds to India.
On Tuesday, Mr Ajit Singh also said the government could consider bilateral agreement hikes with other countries as well, especially if carriers of those countries seek to invest in Indian private carriers. At a meeting of the committee of secretaries (CoS) presided over by the Cabinet Secretary on Tuesday evening, the civil aviation ministry also said there was no security threat in allowing Etihad to operate in India.
On the Jet-Etihad FDI deal, the PMO said it “is a matter between private parties which needs to be approved by the concerned agencies as per the policies and laws in place”.