Jet-Ethiad Deal And Competition Commission of India
INTRODUCTION
The CCI approved Jet's proposal to sell 24% stake to the Abu Dhabi-based carrier on November 12. The two carriers closed the Rs 2057.67 crore deal on November 20.
WORDS USED IN THE ARTICLES
‡' Competition Commission of India (CCI): Competition Commission of India is a body of the Government of India responsible for enforcing The Competition Act, 2002 throughout India and to prevent activities that have an adverse effect on competition in India. It was established on 14 October 2003. It became fully functional in May 2009.
‡' The Competition Act, 2002: The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws.
1. The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and Merger and acquisition), which causes or likely to cause an appreciable adverse effect on competition within India.
2. The objectives of the Act are sought to be achieved through the Competition Commission of India (CCI), which has been established by the Central Government with effect from 14 October 2003.
3. CCI consists of a Chairperson and 6 Members appointed by the Central Government. It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
4. The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
WHAT IS THE DEAL?
‡' Etihad - Abu Dhabi's national Carrier has just bought the stake of 24% in the domestic carrier Jet Airways which is worth $900 million.
‡' Etihad has the plan to connect their country with the 23 smaller Indian cities via Jet Airways network.
‡' It is in recognition to the recent signing of Government of India with Abu Dhabi to increase the air capacity between the two countries from 13,000 seats a week now to 50,000 in three years time.
WHAT ARE THE CONCERNS?
‡' It is being feared that people from these 23 smaller Indian cities will now directly fly to Europe, Africa or the USA via Jet Cum Etihad Flights. Lot of money has been invested in the Delhi & Mumbai airports which is the current transit airport if someone wants to go to Europe, USA or Africa. Business in these airports may see a decline. Though it is good for passengers.
‡' The traffic of wide-bodied aircraft (from which most of the airport's revenue comes) will be diverted to the smaller airports. So business prospects for the newly modernized Delhi and Mumbai airports may see decline.
‡' In short, Abu Dhabi airport will get prosperous at the expense of Delhi and Mumbai airports.
‡' The deal has come in a rush & surprise considering the fact that till the date India was not allowing any intervention in aviation so as to protect Air India, the troubled state carrier.
‡' Airports in West Asia and Europe are growing & this deal is another setback for Indian aviation industry. It will increase difficulty of attracting FDI in aviation.
‡' Jet Airways may see flight cuts to Europe. Instead now the only target from India will be Abu Dhabi & then after Europe or USA or Africa. This is just going to benefit Etihad and not Jet Airways nor India.
POSITIVE SIDE OF THE DEAL
‡' Strategic investment under FDI policy of the Government of India will deliver wide-ranging revenue growth and cost saving opportunities for both airlines.
‡' Alliance will bring significant benefits to the Indian economy, both in terms of growth, job creation, trade and tourism
‡' Jet Airways passengers from 23 cities in India to gain direct access to an expanded global network
‡' Jet Airways to enhance its services from its primary hubs of Delhi and Mumbai, and introduce new flights from Hyderabad and Bangalore click here for more information about Jet-Ethiad Deal And Competition
‡' The strategic alliance between the two airlines will bring additional traffic, frequencies and revenues to metro airports, as well as other airports of AAI
‡' New India-Abu Dhabi routes and Jet Airways to establish a Gulf gateway for flights to the US, Europe, Africa and the Middle East
‡' The strategic investment enables Etihad Airways to tap into India's fastgrowing 42 million strong travel market
‡' Both airlines' passengers will benefit from fully integrated frequent flyer programs with reciprocal €earn-and-burn'
‡' Alliance will result in both consumer benefits and/or all round efficiencies
‡' This strategic investment with a US$600 million commitment from Etihad Airways will help further strengthening of Jet Airways financial position.
The CCI approved Jet's proposal to sell 24% stake to the Abu Dhabi-based carrier on November 12. The two carriers closed the Rs 2057.67 crore deal on November 20.
WORDS USED IN THE ARTICLES
‡' Competition Commission of India (CCI): Competition Commission of India is a body of the Government of India responsible for enforcing The Competition Act, 2002 throughout India and to prevent activities that have an adverse effect on competition in India. It was established on 14 October 2003. It became fully functional in May 2009.
‡' The Competition Act, 2002: The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws.
1. The Act prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and Merger and acquisition), which causes or likely to cause an appreciable adverse effect on competition within India.
2. The objectives of the Act are sought to be achieved through the Competition Commission of India (CCI), which has been established by the Central Government with effect from 14 October 2003.
3. CCI consists of a Chairperson and 6 Members appointed by the Central Government. It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
4. The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
WHAT IS THE DEAL?
‡' Etihad - Abu Dhabi's national Carrier has just bought the stake of 24% in the domestic carrier Jet Airways which is worth $900 million.
‡' Etihad has the plan to connect their country with the 23 smaller Indian cities via Jet Airways network.
‡' It is in recognition to the recent signing of Government of India with Abu Dhabi to increase the air capacity between the two countries from 13,000 seats a week now to 50,000 in three years time.
WHAT ARE THE CONCERNS?
‡' It is being feared that people from these 23 smaller Indian cities will now directly fly to Europe, Africa or the USA via Jet Cum Etihad Flights. Lot of money has been invested in the Delhi & Mumbai airports which is the current transit airport if someone wants to go to Europe, USA or Africa. Business in these airports may see a decline. Though it is good for passengers.
‡' The traffic of wide-bodied aircraft (from which most of the airport's revenue comes) will be diverted to the smaller airports. So business prospects for the newly modernized Delhi and Mumbai airports may see decline.
‡' In short, Abu Dhabi airport will get prosperous at the expense of Delhi and Mumbai airports.
‡' The deal has come in a rush & surprise considering the fact that till the date India was not allowing any intervention in aviation so as to protect Air India, the troubled state carrier.
‡' Airports in West Asia and Europe are growing & this deal is another setback for Indian aviation industry. It will increase difficulty of attracting FDI in aviation.
‡' Jet Airways may see flight cuts to Europe. Instead now the only target from India will be Abu Dhabi & then after Europe or USA or Africa. This is just going to benefit Etihad and not Jet Airways nor India.
POSITIVE SIDE OF THE DEAL
‡' Strategic investment under FDI policy of the Government of India will deliver wide-ranging revenue growth and cost saving opportunities for both airlines.
‡' Alliance will bring significant benefits to the Indian economy, both in terms of growth, job creation, trade and tourism
‡' Jet Airways passengers from 23 cities in India to gain direct access to an expanded global network
‡' Jet Airways to enhance its services from its primary hubs of Delhi and Mumbai, and introduce new flights from Hyderabad and Bangalore click here for more information about Jet-Ethiad Deal And Competition
‡' The strategic alliance between the two airlines will bring additional traffic, frequencies and revenues to metro airports, as well as other airports of AAI
‡' New India-Abu Dhabi routes and Jet Airways to establish a Gulf gateway for flights to the US, Europe, Africa and the Middle East
‡' The strategic investment enables Etihad Airways to tap into India's fastgrowing 42 million strong travel market
‡' Both airlines' passengers will benefit from fully integrated frequent flyer programs with reciprocal €earn-and-burn'
‡' Alliance will result in both consumer benefits and/or all round efficiencies
‡' This strategic investment with a US$600 million commitment from Etihad Airways will help further strengthening of Jet Airways financial position.
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