Jet-Etihad deal raises many questions
The deal between Jet Airways and Abu Dhabi's national carrier Etihad Airways stinks because of the suspiciously speedy manner in which it was pushed through and the terms of the agreement that seem to be a sell-out of national interests. What is worrisome is that from all available accounts, the Prime Minister himself played a key role in the conclusion of the deal. Now that various allegations of irregularity have surfaced, the Prime Minister's Office has sought to distance him from the dirt. But this tactic will not work, just as it did not when the PMO attempted to insulate itself from the 2G Spectrum scam. The credibility of the Prime Minister had taken a severe beating then; it is doing so now. That the Jet-Etihad pact is now being scrutinised by the Foreign Investment Promotion Board and will come up before the Cabinet for review and approval, does not take away from the fact that an apparent wrong appears to have been done. These measures of verification should have preceded the signing of the deal. Not only should the FIPB clearance have come in advance but that the Cabinet Committee on Investments also should have approved the deal before it was inked. We know that certain quarters within the Government and outside had raised objections over the commercial viability as well as the security implications before the agreement had been finalised. These were not addressed and, instead, the Congress-led UPA regime allowed the two airlines to strike the deal that gives effective control to Etihad in the name of this country getting precious foreign direct investment in the civil aviation sector. Interestingly, around the same time that this deal was finalised, the Union Ministry of Civil Aviation reached an agreement with the UAE to greatly enhance the number of weekly airline seats between India and Abu Dhabi. The agreement between two sovereign countries became an enabler for the dubious Jet-Etihad pact.
Just how lopsided from India's perspective the deal between the two airlines is can be understood from one fact alone: Despite holding a minority stake of 24 per cent in Jet Airways, Etihad will have the right to nominate the chief executive officer and three members on the board. What is equally worrisome is that this deal appears to be a bail-out in disguise for Jet Airways, which will get increased flying rights between India and Abu Dhabi at the cost of other airlines including Air India. The valid question, therefore, is: Has the Government of India facilitated the interests of a particular airline, and that too at the cost of national interestIJ The Government has expectedly rubbished the charge, but the fact that it is now scrambling belatedly to get approvals demonstrates that something is indeed fishy in the manner the Rs 2,000 plus crore-deal was finalised in the first place.
Meanwhile, the political fall-out of the mess is there for all to see. While the PMO has indicated a rethink on the matter and hinted that the Prime Minister has had no role in the murky affair, Union Minister for Civil Aviation Ajit Singh has stated on record that the agreement had the Prime Minister's blessings and that it's a great deal. Prime Minister Manmohan Singh and his Civil Aviation Minister were indeed on the same page when the two airlines announced the pact in the last week of April. Given that he allowed himself to be so carried away by the sales pitch that Mr Ajit Singh and a few other Cabinet Ministers made in the deal's favour that he ignored various substantial concerns, the Prime Minister cannot escape culpability.