The Congress-led UPA Government went ahead with the controversial Jet-Etihad deal despite knowing its adverse implications on India’s aviation sector.
The PMO had warned the Civil Aviation Ministry against going ahead with the deal. RTI replies by the PMO reveal that the Ministry was cautioned about the “negative impact” on India’s prospects in the civil aviation sector if the bilateral deal with Abu Dhabi-based career Etihad for allotting huge seats.
The PMO note titled as “Executive Summary - Impact of Middle Eastern Carriers growth on Indian Aviation” was prepared by PMO few weeks before the Cabinet Committee on Economic Affairs approved the Jet-Etihad deal.
The deal, currently under the scrutiny of Supreme Court, invited widespread criticism as it would deal a fatal blow to India’s national career Air India besides other domestic operators. The note exposes that PMO was later overpowered by those in favour of the bilateral agreement, which provided a huge largesse of 35000 seats per week to Etihad from India.
“With Etihad having recently been granted a high growth in capacity and a code share deal with Jet to further strengthen the already established feeder network, the following can be expected: Reduction of long haul traffic from India and the reduction in long haul destinations. India will not be directly connected across the globe. lesser consolidation at any airport in India, leading to reduced domestic traffic and negative impact on any hub creation in India,” said the PMO’s note to Civil Aviation Ministry.
PMO had raised seven objections on granting approval to the Jet-Etihad deal and the huge seats allotment to Etihad. It cautioned about the loss in business in catering, fuelling and cargo due to the haul of Indian passengers to other destinations via Etihad’s headquarters Abu Dhabi. The note on several occasions cautioned the Aviation Ministry for routing the passenger flow from India through Middle East by avoiding direct traffic to Europe and US.
“lesser stimulation to traffic growth with major impact on tourism promotion as direct connectivity promotes tourism. Passengers will have to bear the burden of the airports lack of recovering already invested capital due to the reduction of quality of traffic,” said the PMO, adding this deal unilaterally benefitted Etihad and would create inconvenience to passengers due to increased travel time.
The deal has been challenged by BJP leader Subramanian Swamy in Supreme Court. The apex court has sought response from the Centre and private operators. Swamy alleged that Etihad deal was to satisfy the Arab sheikhs who lost money in 2G Scam after the SC cancelled the license of UAE-based telecom company Etisalat.