Jet-Etihad deal gets CCI clearance; moves closer to finality

November 13, 2013

Jet-EtihadNew Delhi, Nov 13: Paving way for closure of long- pending Jet-Etihad deal, fair trade regulator CCI on Tuesday approved the proposed acquisition of 24 % stake in the Naresh Goyal-led Indian carrier by Abu Dhabi-based airline.

Etihad is acquiring this stake for Rs 2,058 crore in a deal that was announced in April this year, becoming the first-ever FDI (Foreign Direct Investment) in an Indian carrier by an overseas airline.

However, the deal has been stuck for months for want of various regulatory approvals. The clearance by the Competition Commission of India (CCI), whose nod is necessary for any major merger and acquisition deal involving an Indian entity, was among the last regulatory approvals for this transaction.

Among others, the deal has been already cleared by capital markets regulator Sebi, Foreign Investment Promotion Board (FIPB) and Cabinet Committee of Economic Affairs (CCEA).

The deal had to be revised after Sebi raised objections over a previous structure that involved Etihad possibly getting larger control over Jet Airways, which is a publicly listed company in India.

"Considering the facts on record and the details provided in the notice (under relevant section of the Competition Act)... the Commission is of the opinion that the proposed combination is not likely to have appreciable adverse effect on competition in India and therefore, the Commission hereby approves the same," CCI said in an order.

The majority order, passed by CCI chairman Ashok Chawla and four members, said that the approval can be revoked if information provided by Jet and Etihad is found to be incorrect at any time.

However, one CCI member passed a minority order dissenting with the majority view and said the deal could have adverse impact on competition in international air travel market.

Dissenting member Anurag Goel said he was "of the prima facie opinion that the proposed combination is likely to cause an appreciable adverse effect on competition within the market of international air passenger transportation from and to India."

"A notice may, therefore, be issued to show cause to the parties to the combination calling upon them to respond within thirty days of the receipt of the notice, as to why investigation in respect of the proposed combination should not be conducted," his dissent order said.

The Commission said the approval is granted on the basis of "underlying competition assessment" based on information provided by the parties in their notice, which has been modified and supplemented from time to time.

"This approval should not be construed as immunity in any manner from subsequent proceedings before the Commission for violations of other provisions of the (Competition) Act. It is incumbent upon the parties to ensure that this ex-ante approval does not lead to ex-post violation of the provisions of the Act," CCI said.

The regulator also noted that this "approval however, shall have no bearing on proceedings under Section 43A of the Act". Under this section, CCI has powers to slap penalties for non-furnishing of information on M&A deals.

While Jet and Etihad were said to be in discussions for a long time, they had formally announced their proposed deal in April this year.

However, the original deal had hit several regulatory road blocks, primarily on concerns that it could lead to a foreign airline getting control over an Indian company in a sensitive sector like aviation and Jet's public shareholders were being given a raw deal.

Subsequently, the deal was restructured to address the apprehensions of various regulators and other government bodies, such as Sebi, CCI and FIPB.

After the deal, Etihad would have 24 % stake in Jet Airways, main promoter Naresh Goyal would have 51 % and public shareholders would have remaining 25 %.

Besides, Etihad's control over board matters and other business decisions was also curtailed in revised deal.

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News Network
July 18,2020

Washington, Jul 18: The government of India has agreed to allow US air carriers to resume passenger services in the US-India market starting July 23, the US Transportation Department said on Friday.

The Indian government, citing the coronavirus, had banned all scheduled services, prompting the US Transportation Department in June to accuse India of engaging in "unfair and discriminatory practices" on charter air carriers serving India.

The Transportation Department said it was withdrawing an order it had issued requiring Indian air carriers to apply for authorization prior to conducting charter flights, and said it had approved an Air India application for passenger charter flights between the United States and India.

A group representing major US airlines and the Indian Embassy in Washington did not immediately comment on Friday.

India's Ministry of Civil Aviation said on Twitter it was moving to "further expand our international civil aviation operations" and arrangements from some flights "with US, UAE, France & Germany are being put in place while similar arrangements are also being worked out with several other countries."

"Under this arrangement," it added, "airlines from the concerned countries will be able to operate flights from & to India along with Indian carriers."

The US Transportation Department order was set to take effect next week. The Trump administration said in June it wanted "to restore a level playing field for US airlines" under the US-India Air Transport Agreement. The Indian government had banned all scheduled services and failed to approve US carriers for charter operations, it added.

The US government said in June that Air India had been operating "repatriation" charter flights between India and the United States in both directions since May 7.

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Agencies
July 18,2020

New Delhi, Jul 18: National carrier Air India on Friday said that it is in a ‘very challenging financial’ situation and is taking recourse to several initiatives, with a view to ensuring the continuance of its operations.

The airline, in a statement, noted that it has introduced the partially voluntary 'Leave Without Pay' (LWP) scheme on July 14.

"The scheme primarily enables employees to avail the benefits of proceeding on leave without pay on a voluntary basis. The LWP scheme has been introduced for grant of leave without pay and allowances for permanent employees for a period of six months or two years, which is extendable upto 5 years," the statement said.

"Air India had brought out similar scheme earlier... Several hundred employees have, in the past, availed of the LWP Scheme."

As per the statement, in the wake of the ongoing Covid-19 pandemic, there may be employees who are unable to attend their office duties in person on account of personal reasons.

"The LWP scheme enables employees to take a break from their office responsibility for a defined period of time with the approval of the management, while retaining their employment with the company," the statement said.

"They will continue to avail facilities such as passage, medical and housing at specified rates."

Accordingly, the LWP scheme provides the opportunity to employees to take up alternative employment with the approval of the management during the period of the said leave, the airline said.

"The LWP scheme is a win-win situation for both the management as well as employees as it provides flexibility to employees and simultaneously reduces the wage bill for the company," the statement said.

"It is important to note here that the Covid-19 outbreak has very seriously impacted the airline sector and currently, the airline operations of the company are a small fraction of the prior Covid level operations."

The airline said that employees are encouraged to apply for availing the benefit of the scheme, in the prescribed format, by August 15.

"The only addition in this scheme as compared to the earlier LWP scheme is that the management can pass an order requiring the employees to go on leave for a period of six months or two years (extendable upto 5 years) compulsorily taking into consideration 'Suitability, Efficiency, Competence, Quality of performance, Health, Non-availability of employee and Redundancy'," the statement said.

Furthermore, the airline said that this provision has been introduced for use, "very sparingly", with a view to ensuring that the overall efficiency of the organisation, improves and the management will ensure that this will be implemented with complete fairness and transparency as per prescribed procedure.

Consequent to the announcement of the scheme, Air India unions are discussing their strategy against the move which might involve legal recourse.

An Air India union leader on Friday told IANS: "This is going to affect the livelihood of many. Why not every employee of AI take LWP a few days every month. This way the burden can be shared."

"The motive of the top management is to save their money by snatching money from lower employees."

According to Air India PIM document, as on November 1, 2019, the airline, on a standalone basis (without subsidiaries), had around 14,000 employees, including fixed term contract staff.

The development comes as the Centre has re-initiated the airline's divestment plan with new norms.

Interestingly, this time, it has sweetened the deal by substantially reducing the debt on the airline's account books and offered a 100 per cent stake in the loss-making airline.

The last date for bid submission to acquire Air India has also been extended to August 31.

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News Network
March 9,2020

Kolkata, Mar 9: A diabetic man died in the isolation ward of a hospital in West Bengal's Murshidabad on Sunday, a day after he was admitted there with suspected symptoms of coronavirus following his return from Saudi Arabia.

According to doctors, he was admitted to the hospital with fever, cough and cold.

Though test results of his blood and swab samples for novel coronavirus were awaited, it can be said that he died probably of diabetes, Director of Health Services Ajay Chakraborty told PTI.

"The man was highly diabetic and was on insulin. He returned home from Saudi Arabia and had no money to take insulin for the last three to four days.

"He was also suffering from fever, cough and cold. He was admitted to the isolation ward of the Murshidabad Medical College and Hospital yesterday and died today," the health services director said.

"We are waiting for the results of medical tests. The possibility of his death due to novel coronavirus infection is remote," he said.

However, precautions will be taken during the last rites of the victim according to the directives set by the central and state governments for patients who die of the virus, another senior official said.

"Family members will not be allowed to touch the body since the man had been suffering from cough and breathlessness. Those performing his last rites will be given protective gear, masks and gloves. Though test results are yet to be known, we do not want to take any chance," he said.

Meanwhile, the state health department has issued a directive to all private medical facilities to create a system for assessing all patients at admission allowing early recognition of possible COVID-19 infection and immediate isolation of patients with suspected novel coronavirus infection in an area separate from other patients.

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