Communist Party of India (CPI) MP Gurudas Dasgupta has written to Prime Minister Manmohan Singh asking him to review the buying of 25 per cent stake by Abu Dhabi-based Etihad Airways in the domestic carrier Jet Aiways. He has alleged that the share sale could cause a loss of nearly Rs.1,000 crore to national carrier Air India due to increase in licensed capacity for carriage of passengers and hurt India’s interests.
“At the moment, the air traffic between India and Abu Dhabi is only 1,200 daily passengers. The existing licences allow 3,600 seats. Neither Air India nor Jet Airways has been able to utilise the licensed capacity. What is beyond comprehension is that with the completion of the commercial deal, the licensed capacity will be increased from 3,600 to 6,700 with immediate effect. There appears to be an underlying danger that the cash-rich Gulf airline could prevail upon Jet Airways to increase the flight undercutting the tariff and taking over large number of passengers who otherwise would have used Air India. Why is the government assisting indirectly a foreign airline at the cost of other domestic players, including Air India? It is understood that Air India could stand to lose revenue in excess of Rs.1,000 crore because of this deal,’’ he said in his May 1 letter to the Prime Minister.
He pointed out that CAG had, last year, criticised the government for increasing the licensed capacity of foreign country and airlines, particularly in the Gulf region, much above the actual requirement of the market. It also mentioned that Air India suffered heavily on account of liberal bilateral rights to Gulf countries. “There is also a possibility that Jet will receive payments from Etihad in exchange for making its flights available to Etihad carrying the passengers from Delhi,” he added.
Mr. Dasgupta said the government was helping Air India revive its fortunes. In the recent past, things had improved a lot with the national carrier, he added.
Coming as it did, the government’s decision to allow Etihad and Jet Aiways combination to have more flights to Abu Dhabi and increasing the existing traffic capacity definitely would have a disastrous effect, he said. Mr. Dasgupta urged the Prime Minister to review the Jet-Etihad deal.