Jet files reply on Etihad deal, ball in watchdog's court now

Competition commission of India will examine whether overall competition in Indian aviation market is not affected and if interests of all stakeholders are protected by the Jet-Etihad deal

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Srishti Pandey | June 4, 2013



After the fair trade regulator competition commission of India (CCI) flagged various concerns regarding the 24-percent stake purchase in Jet Airways by Abu Dhabi-based airline Etihad, Jet has filed its response with the CCI. The competition watchdog will now examine the response report and expected to give either a thumbs up or down within a month.

“On the completion of the deal, we had sought some clarifications on some grounds under sections 5 and 6 of the Competition Act. They (Jet Airways) sent us a response late last evening and we will begin investigation as per procedure,” said a senior CCI official privy to the deal.

The official, however, refused to comment on the nature of issues raised by the competition watchdog or share details of the report submitted by the Indian carrier.

In April, Etihad had agreed to invest Rs 2,058-crore in the Naresh Goyal-led Jet Airways, making it the first foreign direct investment (FDI) in an Indian airline. However, immediately after the announcement of the deal, various stakeholders, including market watchdog securities and exchange board of India (Sebi) and CCI, raised concerns, albeit different ones.

In addition, Janata Party chief Subramanian Swamy on Monday wrote to prime minister Manmohan Singh demanding a probe into the deal.

As per existing norms, CCI will have to submit its report within a month, ruling if the two airline companies should proceed with the deal as it is or suggest changes. “First, we will check if the response submitted by them (Jet) is complete in every aspect and covers all queries we raised. Once this is done, and the report is found to be complete, we will initiate the investigation process and examine specifics of the case,” the official added.

The deal is likely to get a green signal only if, following its examination, CCI is assured that overall competition in the country’s aviation market is not affected and interests of all stakeholders are protected. As of date, out of  123 merger and acquisition deals being investigated by CCI, it has cleared 120 of them.

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