The Rs 2,058 crore deal between Jet Airways and Etihad Airways will benefit passengers, as increased competition will bring down air fares, aviation sector experts said on Wednesday.
According to Captain Gopinath, the founder of erstwhile Air Deccan, the increased competition will lead to low air fares, besides bringing about improvement in the passenger amenities.
Jet promoter Naresh Goyal and Etihad President and CEO James Hogan on Wednesday announced a strategic equity alliance in Abu Dhabi under which the Indian private carrier would sell 27.26 million shares in a preferential offer to Etihad at Rs 754.74 apiece.
"The deal may be good from the passengers' point of view as it would offer an enhanced connectivity, but at the same time too much access into the domestic market may result in Abu Dhabi becoming another Dubai which has today become a hub for the West-bound traffic," an expert said.
Stating that Jet Airways will have new funding opportunities, aviation think-tank Centre for Asia Pacific India head Kapil Kaul said the deal will help Jet Airways meet its capital requirement.
Currently, all domestic carriers taken together are allowed to operate 13,300 seats per week on the India-Abu Dhabi route besides a two per cent operational flexibility as per the existing bilateral rights.
Amidst the talks on enhancing seat capacity on the sector between India and UAE, Jet Airways has sought the capacity to be expanded by 41,000 seats per week to meet its expansion plans.
Following the deal, the Jet-Etihad alliance claims to cover over 140 destinations and provide direct foreign connectivity to Indian passengers from 23 metro and non-metro cities.