Jet-Etihad deal to infuse new life in India's civil aviation: Assocham

Last Updated: Sun, Feb 03, 2013 08:10 hrs

New Delhi, Feb 3 (IANS) The stake-sale deal between Jet Airways and the Abu Dhabi-based Etihad Airways will infuse new lease of life into the troubled Indian aviation industry, a leading business chamber said Sunday.

"Induction of capital by Etihad, one of the most efficient airlines of the world will not only improve the financial position of Jet Airways but also bring several operational benefits," the Associated Chambers of Commerce and Industry (Assocham) said in a statement Sunday.

The Indian civil aviation sector has been going through a tough operating environment with high fuel and interest costs - and lower passenger traffic.

"The good thing is that in the last few months several initiatives have been taken to increase the comfort level of the global investors," Assocham said.

It added that after the Etihad-Jet deal, fresh efforts should be made to revive the grounded Kingfisher Airlines.

A joint delegation of Jet Airways and Etihad Airways met Finance Minister P. Chidambaram Thursday, indicating that a stake-sale deal between the airlines could be round the corner.

The delegation, led by Jet Airways' Naresh Goel and Etihad chief executive James Hogan, had met Civil Aviation Minister Ajit Singh and Commerce Minister Anand Sharma Jan 31.

Talk of a possible stake sale has been doing the rounds for three months, ever since the government allowed foreign airlines to pick up 49 percent shares in domestic carriers.

Foreign carriers have so far not been allowed to directly invest in Indian carriers for security reasons although 49 percent FDI by non-airline players was allowed.

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