Following representations made against the Jet Airways-Etihad deal by members of Parliament (MPs) and political leaders belonging to various parties including the Left and the BJP, and various concerns raised during a recent meeting of the Foreign Investment Promotion Board (FIPB), the Cabinet Secretary is likely to chair a meeting on Tuesday to look into various aspects of the aviation bilateral agreements and the Jet-Etihad deal, including certain security concerns on the implications of the deal.
This comes after the Prime Minister’s Office (PMO) is also understood to have posed a few queries regarding the deal. While top echelons of the government had earlier approved the astronomical four-fold hiking of the aviation bilateral seat entitlement between India and the UAE at the same time when the Jet-Etihad deal was announced, the latest indications are that the government may have decided to do a re-think on the deal and the bilaterals after intense pressure from political parties and certain aviation stakeholders.
The FIPB had recently deferred the necessary approval needed for the `2,050-crore FDI deal between the Indian private carrier and the Abu Dhabi-based UAE national carrier. According to the Jet-Etihad deal that was clinched in April this year, Etihad will buy 24 per cent stake in Jet Airways for $379 million (`2,050 crore).
But what has raised concerns in some quarters is that at that time, India had also inked an agreement with the UAE wherein the weekly bilateral rights for designated carriers of both countries were hiked astronomically from the current 13,300 to about 50,000 by providing for additional entitlement of 36,670 seats per week spread over a period of three years. The agreement between India and the UAE was seen as a double bonanza for both Jet Airways and Etihad, even as several other scheduled carriers and private airport operators in the country had raised concerns that the deal would result in Abu Dhabi taking away passenger-traffic from India that was bound for destinations in Europe, America and Africa. Speculation was rife that certain objections may have also been raised on the deal earlier by an inter-ministerial group.
But top civil aviation ministry sources had maintained earlier that the decision to hike the aviation bilateral entitlement between India and the UAE by nearly four-fold had received the nod from the highest political levels before a senior civil aviation ministry official visited Abu Dhabi and clinched the new bilateral agreement towards the end of April. Civil aviation minister Ajit Singh, a strong supporter of the deal and the bilateral seat enhancement between the two countries, had apparently received the nod for this from the highest levels in the government.

Government sources had earlier told this newspakper that various concerns were raised during the FIPB meeting that included the perception that Etihad was commanding far more influence over Jet than the 24 percent stake in Jet Airways being acquired by it would give it. Concerns over Substantial Ownership and Effective Control (SOEC) were also raised, even as the government wanted more clarity and details on the effective control and ownership of Jet Airways after the deal. According to sources, certain persons who were to occupy senior posts in Jet Airways after the deal were also yet to receive the mandatory security clearance from Indian authorities but this was seen as a procedural issue. Other concerns pertained to the exact number of foreign nationals on the Jet Airways Board and certain differences between the Jet-Etihad agreement document and the application submitted to the FIPB for approval. Another concern was that the “place of business” — that refers to the place where crucial decisions are taken by the airline — was being shifted from India to Abu Dhabi.