by Devesh Agarwal
We welcome your feedback and comments on the Jet-Etihad deal.
Without a doubt the humongous increase in seat capacity offered to the Abu Dhabi government by India has some quid-pro-qua links to the Jetihad deal. There is also talk that the bilaterals seat increase was to pacify the UAE government after their telecom company allegedly lost over $1 billion in the recent 2G scam, and get foreign investment flowing in to India from that country.
Regardless of the reasons, the new proposed bilateral air services agreement (ASA) has come under severe flak from many political quarters. At the focal point of attacks is the Prime Minister, who had given his approval to the Group of Ministers (GoM) comprising P. Chidambaram (Finance), Anand Sharma (Commerce), Salman Khurshid (External Affairs) and Ajit Singh (Civil Aviation), to proceed and conclude the ASA.
Dr. Manmohan Singh is regarded as an honourable man, but his reputation has taken a hit following the 2G telecom scam and Coalgate, where national resources like spectrum and coal were doled out to political supports for cheap. A weak Congress, facing a multitude of elections, is now desperately trying to protect the image of the Prime Minister and the memorandum of understanding (MoU) signed with the UAE government on the ASA is now being questioned. To help weather the political story, give cover to the Prime Minister, and justify the deal, a note from the civil aviation ministry is being prepared for perusal and overall approval of the MoU, the Cabinet.
The suave and politically connected Naresh Goyal is reportedly pacing the corridors of power, and doing all he can to keep the Jetihad deal alive.
On the side, news reports indicate Etihad is waiting for the outcome of the cabinet meeting, and the decision on the MoU. Indirectly, it has been reported, that if it does not get the massive increase in traffic rights, Etihad make walk away from the deal.
Jet is facing a debt of over 12,000 Crore ($2 billion), higher than even Kingfisher Airlines, and its very survival is at stake.
Do you think the Jetihad deal will fructify? Under what circumstances? If the deal does not fructify, will the baniya Naresh Goyal be able to prevent Jet Airways experiencing the same fate as Kingfisher Airlines?
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