Jet-Etihad deal under scanner in Singapore
Moneylife Digital Team 19 June 2014

Competition Commission of Singapore feels the Jet-Etihad alliance relates to the provision of international air passenger transport services with a specific focus on the Singapore origin and destination city pairs

The Jet Airways-Etihad deal is facing fresh trouble as the Competition Commission of Singapore has begun a scrutiny of the deal to probe any possible violation of its competition laws.

 

The deal, which involves purchase of a 24% stake in Naresh Goyal-led Jet for about Rs2,060 crore by Etihad and other tie-ups, has been going through turbulent times ever since it was announced more than a year ago in April 2013.

 

After months of scrutiny, the deal got consummated late last year after clearance by various Indian regulators, including the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI).

 

However, the deal has now come under the scanner of the Competition Commission of Singapore, as the alliance 'relates to the provision of international air passenger transport services (and associated support services), with a specific focus on the Singapore origin and destination city pairs'.

 

The CCS said in a notification that it was seeking feedback from the public and other stakeholders till 11th July, after which it would take its final call on the deal.

 

The notification was issued “in relation to Section 34 of the Competition Act which prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have as their object or effect the prevention, restriction or distortion of competition within Singapore’’.

 

The CCS further said the Jet-Etihad alliance “includes pricing, route and schedule coordination, marketing, code-sharing, networks, customer service and resourcing decisions between the parties.

 

“The parties envisage that the proposed commercial alliance will result in various efficiencies and synergies. These include lower administrative costs, sharing of joint resources, better customer services and efficient administration of the parties’ respective businesses,” it added.

 

Abu Dhabi-based Etihad is the national airlines of the United Arab Emirates and it operates to over 85 passenger and cargo destinations in over 50 countries.

 

Jet is a leading airline in India, operating to over 50 domestic and 20 international destinations.

 

The two carriers are members of any of the three major international aviation alliances (Star Alliance, Oneworld and Sky Team), CCS said.

 

The CCS is a statutory board functioning under the purview of the Ministry of Trade and Industry of Singapore.

 

The Competition Act of Singapore empowers the CCS to investigate alleged anti-competitive activities, determine if such activities infringe the Act and impose suitable remedies, directions and financial penalties.

Comments
Nagesh Kini
8 years ago
All the concerns raised by the CCS are absolutely valid.
In the first place why were they not raised by the CCI and SEBI who ought to be the right authorities, since the locus is India.
Free Helpline
Legal Credit
Feedback