ASSIGNMENT 02

Jet Airways (India) Ltd. has deposited a new revised agreement to an Indian regulator to get approval for the airline's long-pending plan to sell a stake of jet airways to Abu Dhabi's Etihad Airways P.J.S.C. The new revised agreement has been filed with the Foreign Investment Promotion Board, which examines foreign investment proposals. The revised agreement deducted the number of members that Etihad can appoint to Jet's board.
On April, the Indian airlines has planned to sell its 24% stake to Etihad for an amount of $ 380 million, but the deal was pending because of the question of who would control the company after the is completed. Indias economic affairs secretary wanted to get more details of effective control and about ownership. In April Jet and Etihad said in the press release that the ownership and control will be in hands of Indian company .Jet airways founder Naresh Goyal would be the companys non executive chairman. The earlier deal with the eithad had given right to Etihad to appoint 3 directors to Jets board and nominate the Vice Chairman. The new revised deal agreement would not allow Etihad to appoint more than 2 members to the jets boardbut it was not clear on the right to appoint the Vice Chairman. There will be no
change in the shareholding pattern with Etihad picking up 24 per cent, Jet's majority shareholder Naresh Goyal holding 51 per cent and 25 per cent with others, including institutions and individuals.

Most of Indian airlines companies have been incurring losses due to high taxes on fuel, more competition and a decline in no of passengers. Jet airlines was among the 1st Indian airlines which tried to take advantage of the change in rules with cheap cost.
James Hogan

Etihad Airways CEO , said that the Indian market is one of opportunity and is fundamentally key for our development as it is young and growing with market opportunities.

The Rs 2,058 crore investments can lead to other international airlines companies investing in India while the passengers will get benefits from Etihad's global network.

Jet-Etihad hub will be situated in Abu Dhabi, the passengers can access to a number of new routes to African cities, US and Europe.

With Jet Airways access to low cost fuel, flying could also become cheaper.

what are the causes for Jets poor show?

The airlines revenue generation has declined by 13% over last years June quarter to Rs. 3, 779 crore mainly due to a drop in passengers. It is facing cost pressures too, this time not so much from fuel expenses.