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Rivals beat Jet Airways at the lobby game

Rivals beat Jet Airways at the lobby game

Already under the scanner for ceding unusual levels of management control to new partner and Middle East carrier Etihad in a Rs 2,058 crore deal, Jet Airways finds itself with its back to the wall in a game it normally is very good at: lobbying.

Photo: Reuters <em>Photo: Reuters</em>
Already under the scanner for ceding unusual levels of management control to new partner and Middle East carrier Etihad in a Rs 2,058 crore deal, Jet Airways finds itself with its back to the wall in a game it normally is very good at: lobbying.

Rival airlines are lobbying hard against the government decision to allot 36,670 seats weekly allotted to Abu Dhabi-based Etihad, which many in the industry claim was the sweetener that clinched the stake sale in the Naresh Goyal-controlled Indian carrier. The earlier allocation per week under so-called bilaterals with the Arab emirate was 13,600 seats.

Bilaterals are government-to-government agreements that decide airline capacity on routes between two countries.

Pointing fingers at Indian rivals, a senior civil aviation ministry official said that both IndiGo and GoAir officials met some members of Parliament belonging to Bharatiya Janata Party with their grouse against the deal. "Low cost airlines like IndiGo and GoAir have opposed the deal and along with MPs they have shot off letters against the deal as there are vested interests that want the deal to be nipped," the official said.

The MPs are Jaswant Singh, Rajiv Pratap Rudy and Bollywood star-turned-politician Shatrughan Sinha, the official said, requesting anonymity. The letters were sent to different quarters of the government, including the prime minister's office (PMO).

Jet's deal with Etihad
is a lifesaver for the bleeding Indian carrier struggling under a debt of over Rs 13,000 crore and facing a liquidity crunch, as it will allow the Goyal airline access to markets in the US and Africa and within the UAE which no Indian carrier will be able to catch up soon.

"The letters sent by the these MPs were drafted in consultation with a seasoned retired civil aviation official R. K. Singh, who is now a consultant with Rahul Bhatia's (IndiGo promoter) firm InterGlobe," the official added. Singh was a joint secretary in the civil aviation ministry. "GoAir officials also went and met Jaswant Singh to take up the matter," the official added.

IndiGo did not respond to a query seeking comment. An email from a GoAir spokesperson said: "GoAir completely denies such an allegation. This is absolutely false." In a text message reply to Business Today, R.K. Singh said, "There is no truth in what is said in your SMS."*

Rudy, who is the general secretary of the BJP, said he did not have a hand in routing anti-Jet grouses. Rudy is a trained commercial pilot and flew with IndiGo. "I am not dependent on IndiGo and I can fly any carrier." But, he said, the timing of signing of the Jet-Etihad deal and the granting of the bilateral to the Abu Dhabi government was odd and "needs a probe".

Jaswant Singh and Shatrughan Sinha could not be reached for comments.*

The aviation ministry official said the lobbying against the Jet-Etihad deal was not unusual in the business. "Jet Airways too lobbied earlier to maintain its leadership position," the official added, insisting there was no chance of New Delhi revisiting the decision on increasing the bilaterals with Abu Dhabi.

"If Etihad struck the deal with Kingfisher Airlines, our stance on the bilaterals would be the same. They decided to go with Jet, so that is their decision," the official said. The civil aviation ministry will be sending a cabinet note on the grant of bilaterals explaining its stance to the PMO soon.

*Clarification: An earlier version of the story said R.K. Singh had not responded to Business Today's queries

Published on: Jul 14, 2013, 12:00 AM IST
Posted by: Navneeta N, Jul 14, 2013, 12:00 AM IST