Looking forward to nod from India on Jet deal: Etihad CEO
Melbourne/Dubai: Etihad Airways, which is seeking regulatory approval for its planned Rs 2,058 crore stake in India's Jet Airways, said Wednesday that it is awaiting a final approval from the Indian authorities for the deal which could enhance its global reach.
Speaking at the 2013 CAPA Australia Pacific Aviation Summit held in Sydney, Abu Dhabi-based Etihad Airline’s President and CEO James Hogan said, "We are delighted to welcome Air Serbia to our equity alliance, and look forward to receiving final approvals from regulators in India of our investment in Jet Airways," he added.
The Abu Dhabi-based airline last week bought 49 percent stake in Serbia's national airline Air Serbia and a five-year management contract to run it.
"Including Jet Airways, where we?re still going through the regulatory process, Etihad Airways will have six equity and 46 codeshare partners, offering a pool of over 96 million guests and a choice of more than 410 destinations on six continents, serviced by a fleet of approximately 500 modern aircraft," said Hogan.
The Etihad-Jet deal has got a conditional approval from the Foreign Investment Promotion Board (FIPB) and it needs approval of the Indian Cabinet.
"Etihad Airways has applied for investment to a stake of 24 percent in the equity of Jet Airways. The investment is within the ambit of FDI policy on aviation sector," Minister of State for Civil Aviation KC Venugopal said yesterday.
At the aviation conference, Hogan presented a new business model for global aviation describing Etihad's unique strategy of building scale through organic growth, codeshare partnerships and minority equity investments in other carriers.
"Global reach was beyond the capability of any single airline and that progress would come only through partnerships," he said.
He said that cooperation with other airlines includes joint procurement of assets, services and supplies such as aircraft, engines, fuel and insurance, as well as cooperation on issues such as maintenance, crew training and sales activities, reduces costs for all.
"There is ample evidence to show that the traditional airline model and legacy airline alliances are no longer relevant to today?s operating environment and that progress for the industry is unlikely without radical change," he said.
Hogan said sustainable future for global aviation relies on a bold vision and a willingness to break with tradition.
Etihad Airways has become the fastest-growing carrier in commercial aviation history, and one of the most successful, by "rewriting the rulebook", Hogan said.
"This is real value-add for our equity alliance and I am confident it is the way forward," he said.
Hogan said other broader changes were required by governments and regulators, including workforce deregulation, reform of airspace management, technology innovation, more investment in infrastructure and greater collaboration with industry.
He said one major and continuing issue for the air transport industry was constrained access to major airports, many of which were now at maximum capacity and could not be expanded, or would take many years to upgrade.