New Delhi, Feb 4 (IBNS) The Jet-Etihad deal will infuse new lease of life to the troubled Indian aviation sector which has been navigating headwinds from the economic slowdown that resulted into fall in passenger traffic and increase in operational costs, apex industry body ASSOCHAM said.
"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 as well as give an extended reach to the Indian carrier," said the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Etihad has in the last two years picked up strategic stakes in several global carriers like Virgin Australia, Air Seychelles and Aer Lingus. In a way, the Jet would become part of the big Etihad reach all around the world.
ASSOCHAM has also urged the government to ensure that all the mandatory clearances from the Foreign Investment Promotion Board and even from the Reserve Bank of India (RBI) should be given expeditiously so that a refurbished entity takes off with a renewed vigour.
It said after a harrowing times, which saw grounding of the best rated Kingfisher Airlines, the Indian aviation industry is witnessing early signs of revival. The last quarterly results of the Jet Airways and the SpiceJet show a marked improvement.
However, an ASSOCHAM spokesman said a lot more needs to be done both from the industry as also from the policy perspective and clarity to bring back the vibrancy to the sector which had made a very good start, but was caught in the air-pockets mid-way.
The Jet-Etihad deal would also send positive signals among global investors who want to invest in different sectors of the economy.
The IKEA is also an example how the government can improvise on the policy without compromising on the policy integrity to accommodate the genuine difficulties of the multi-national players.
These players, the ASSOCHAM said, have a strong multiplier effect. "The good thing is that in the last few months several initiatives have been taken to increase the comfort level of the global investors, especially by Finance Minister Mr P Chidambaram...His initiative to hold road-shows abroad is a very good initiative," the chamber said.
It said, after the Etihad-Jet deal, fresh efforts should also be made to revive the grounded Kingfisher Airlines.
After all, public money worth several thousands of crores of rupees is locked and the stakeholders - be it banks, employees and promoters - all are the losers, said the ASSOCHAM.