The Jet Airways-Etihad deal may have a negative impact on Air India’s operations but that was to be expected of any such deal following the policy allowing foreign direct investment in Indian carriers, according to Thulasidas, former Chairman and Managing Director, Air India.
Reacting to the strategic investment by the Abu Dhabi-based airline in Jet, he said the Government cannot have a policy for a sector keeping in mind the interest of just one public sector undertaking.
At the same time, as the owner of Air India, it is the Government’s responsibility to take care of its interest, he added. This deal will mean more intense competition not only for Air India but to all the other airlines operating out of India.
This is not the first time the Government’s policy has affected Air India. In the past, the Government had followed liberal bilateral policy granting foreign countries the right to operate more services. That has impacted the national carrier’s operations.
Thulasidas said the Government’s policy was aimed at attracting foreign investment into airlines. From that point of view, it is a positive development. If this alliance is going to benefit Indian passengers, it would be good for the Indian aviation sector. As far as the Indian carriers are concerned, the impact may be different.
Asked if it will have a negative impact on Indian airports (as Jet can fly passengers directly from 23 cities in India to Abu Dhabi), Thulasidas said the impact could be both ways.
Jet can also bring passengers from other countries to India and fly them from here to other international destinations. This will help Indian airports.
Aviation hub
Unlike Dubai or Qatar, Abu Dhabi is yet to develop as a major aviation hub. But what India should do is to develop own hubs.
Delhi and Mumbai will develop gradually into such hubs, he said.
As for Jet Airways, going by the press statement, the deal would help in its expansion plans.
Since Etihad’s stake is under 26 per cent, it cannot block any special resolution as Jet retains controlling majority.