Aviation ministry shoots down proposal for hike in FDI limit

The deal between Jet Airways and Etihad,where the former has announced plans to sell 24 per cent to Etihad for Rs 2,060 crore,has been stuck at the Foreign Investment Promotion Board,which has deferred the matter once because of objections raised by the civil aviation and corporate affairs ministries. The aviation ministry had mainly raised its concerns over the change in the place of business and the corporate affairs ministrys concerns pertained to the substantial ownership in the airline that Etihad would enjoy in Jet Airways post the deal,despite having a minority stake.

The deal has also hit an air pocket after some Members of Parliament MPs wrote to the Prime Minister raising safety concerns over the deal. The MPs also raised questions over the need for a three fold increase in bilateral air traffic rights between India and Abu Dhabi,following which the deal between Jet Airways and Etihad was announced. Clarifying that the Jet-Etihad deal and increase in air traffic rights,sources in the government said that the flying rights were increased after Abu Dhabi committed an investment of 50 billion into the country.

The increase in bilateral traffic rights is awaiting post facto approval from the Cabinet. The deal between two airlines will also need clearance by the Cabinet after the FIPB approves it. Even as the FDI limits for scheduled operators will not change,the civil aviation ministry has favoured an increase in FDI limit to 100 per cent from 74 per cent for non-schedule operators.

Naresh Goyal meets Chidambaram

New Delhi: Jet Airways chief Naresh Goyal on Wednesday met finance minister P Chidambaram. The meeting came amidst the controversy raked up by some politicians including those from BJP,CPI and Trinamool Congress,over the Indian carriers sale of 24 per cent of equity to Abu Dhabi-based Etihad Airways. ENS