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Jet-Etihad deal under Singapore watchdog glare

Friday, 20 June 2014 - 6:20am IST | Agency: dna

The Jet-Etihad deal has run into fresh troubles as the fair trade watchdog of Singapore announced that it would conduct a scrutiny over the deal between the second largest carrier, Jet Airways and Abu Dhabi-based Etihad Airways, to check on any possible violation of competition laws.

"The Competition Commission of Singapore (CCS) is seeking feedback on the proposed commercial alliance between Etihad Airways and Jet Airways," said a statement issued by CCS on their website.

"CCS received a notification for decision on 6 June 2014, with regard to the proposed commercial alliance. This (alliance) relates to the provision of international air passenger transport services (and associated support services), with a specific focus on the Singapore origin and destination city pairs affected by the proposed commercial alliance," the statement further added.

Experts however said that CCS scrutiny will not really have any major impact on the deal.

More than a year after the announcement of the Jet-Etihad deal, the two airlines cleared the last regulatory hurdle in May this year. The deal received clearances from India's market regulator, Securities and Exchange Board of India (Sebi), while Competition Commission of India gave its nod to the deal last year.

Jet-Etihad was the first deal to be announced in April last year, after the government allowed 49% foreign direct investment (FDI) in the Indian airlines. Etihad purchased 24% stake in Jet Airways in a deal worth about Rs 2,058 crore.

CCS said that the notification is made in relation to Section 34 of the Competition Act which prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have as their object or effect the prevention, restriction or distortion of competition within Singapore.

"Airline is an international business. Normally, international regulators do not raise issues. However, the Indian government will have to study and take a call accordingly. But we don't believe it will have any impact on the deal as such," said a Mumbai-based airline consultant who did not wish to be quoted.

"Instead of opposing the deal, Singapore should look at how they can offer better competition to the routes," he added.

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