Civil Aviation Ministry to move Cabinet note on Jet-Etihad deal this week

New Delhi: The Prime Minister's Office seems to have had the desired effect on the Civil Aviation Ministry in the controversial deal between Abu Dhabi's Etihad Airways and private Indian airline, Jet Airways.

This week, the ministry will send a note to the Cabinet Secretariat, seeking a post-facto approval for the seat-sharing pact with Abu Dhabi where India offered an additional 36,670 seats on flights between the two countries over the next three years. The bilateral agreement was signed on the same day in April when the Jet-Etihad deal was announced.

In a note dated June 13, the Prime Minister's Office told Civil Aviation Minister Ajit Singh that the PMO had several reservations about giving away extra seats to the Arab emirate.

The PMO note followed several complaints by MPs like Jaswant Singh, Dinesh Trivedi and Subramaniam Swamy, who alleged that the Indian government signed the seat-sharing pact to facilitate the Jet-Etihad deal.

Etihad is the national airline of Abu Dhabi, and the MPs alleged that more seats to Abu Dhabi would benefit only them.

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If the deal is cleared, Etihad will get 24 per cent stake in the private Indian airline for Rs. 2,058 crores. The MPs argue this means that Abu Dhabi would effectively become a hub for long distance Indian passengers flying to Europe and North America. Under the deal, the combined network of the two airlines will connect more than 38 domestic Indian airports to virtually all the major international airports across the Atlantic Ocean.

In fact, the PMO note also raised these issues by asking if Jet and Etihad would "use bulk of the seats on this route". However, sources who are involved in preparing the Cabinet note say the Aviation Ministry will argue the merits of the deal.

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