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Jet-Etihad deal is bad for passengers, industry: Jitendra Bhargava

Saturday, 14 December 2013 - 1:32pm IST | Agency: DNA
Jitendra Bhargava, former executive director of Air India and aviation industry veteran, on Thursday challenged the Rs 2,058 crore alliance of Jet Airways and Etihad Airways in the Competition Appellate Tribunal or Compat, in spite of the deal-is-fair clearance given by the Competition Commission of India (CCI) last month. Yuga Chaudhari asked him why he thinks that the deal is not fair. Edited excerpts from the interview:

Why the petition?
Having worked with the airline industry, I know how such decisions impact (other airlines). Earlier, (such impact would be on) only Air India but now other carriers as well. From a bigger perspective, it becomes clear that the government, with limited knowledge of the aviation sector, takes such decisions without realising the full impact on the industry.

The CCI, markets regular Sebi and the Foreign Investment Promotion Board have all cleared the deal alright, but have they really done a thorough job? Or, were they under some compulsion while taking decisions? We all know 36,700 seats were given as a sweetener when the deal was done.
It should not have been done, but they (seats) were given without any logical reason.

When you put so many seats into one basket, in a combination of two airlines at the expense of others, it is not fair to other airlines.

So, you can’t ensure fair competition because the Jet-Etihad deal creates unequal players.
I’m talking in terms of unequal share of market. With the kind of seats given, Jet-Etihad would be a major player for destinations in Europe and the US, they would take people from here and they can play with fares, flight schedules, so on. So, in the process, other airlines eventually will withdraw their flights, thereby reducing competition. The Jet-Etihad deal would not really enhance healthy competition.

The other thing is, does the CCI have the requisite competence to review and analyse the market and draw a perspective about the possible long-term impact of its decisions on the sector? Did they consult anyone? They have no consultant. There is a market analysis done, which is a point that I have raised.

All I am saying is, please do a thorough analysis. View it from the perspective of the good of the aviation industry, good of the Indian passengers. But when I look at it, it’s good for Etihad, it’s good for Jet, but not necessarily good for passengers and for the Indian aviation industry.

If that were true, why are other airlines not opposing the Jet-Etihad deal?
They have not been asked.

On April 18 this year, civil aviation secretary convened a meeting of all stakeholders – all airlines, all airports. Everybody opposed it. The voiced their concerns.

So the question is, despite this (opposition to the deal), they (the aviation ministry) went ahead and okayed the deal. If every stakeholder had opposed it, why did they go ahead with it? Then, the CCI asked Air India to furnish details, their concerns.

Why was a similar letter not sent to other stakeholders?

Even Air India’s concerns were found invalid. So it’s about a legal aspect, competition, and it is unfair to the rest of the industry. All these facts are there in my petition.

But then, the ministry recently disapproved lifting of the cap on the number of weekly flights from Qatar...
What is its argument? That the Indian side is not using all of the existing allocation of seats for Qatar? Same things were true for Abu Dhabi. Some 12,000 seats which they had per week were not fully utilised by India and even by them (Etihad). So, where was the need to give them 36,000 needs?

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