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Corporate

Etihad deal is a flight to survival for Jet Airways staff too

By Sindhu Bhattacharya

New Delhi: When a mega deal is in the offing, many times competitors and disgruntled employees try to spoil the party or, if they fail to do so, at least get a piece of the cake.

More so when the impending deal is an equity alliance between Jet Airways and Etihad Airways, a first in the Indian aviation's recent memory.

The two airlines are in advanced stages of negotiations for a deal that may see Etihad picking up 24 percent equity initially.

Deal time. Reuters

Deal time. Reuters

Ever since some enterprising souls at Jet leaked the information of talks between the two airlines last year to a prominent pink paper, the number of instances when stakeholders and jealous competitors have tried to stymie the deal has risen.

Initially, Vijay Mallya of Kingfisher Airlines said he was keenly pursuing Etihad simultaneously with Jet. And there were weeks when the media itself was unsure about which way will Etihad swing, so astute was the timing of Mallya's purported talks with Etihad.

This uncertainty prevailed despite an acquisition of equity in Kingfisher making no real economic sense in any possible way for Etihad, a relatively young airline based in Abu Dhabi which wants to grow fast and profitably through acquisitions.

Till date, neither Etihad nor Kingfisher have clarified that talks may have failed, which is the only reason why a deal with Jet may happen at all.

Then, when the deal between Jet and Etihad was inching closer some months later, with senior officials in the Ministry of Civil Aviation openly alluding to it while expressing ignorance about any deal between Kingfisher and Etihad, another of Jet's rivals got the wind up its sails.

Air India, which has now lost the right of first refusal over flights to overseas destinations and fears stiff competition from Etihad on domestic routes as well, wrote to the ministry saying any deal between Etihad and Jet could prove disastrous for its own growth.

The ministry, long used to treating Air India as its pampered offspring, promised to look into that demand. This despite the FDI regime, which anyway will grant permission to Jet after examining the contours of the deal in detail.

Also, even when a deal between Etihad and Jet is finalised, it will have to meet norms relating to Indians in management positions etc.

According to a story in Mint newspaper last week, a senior ministry official said the expansion of Etihad through Jet in India may be restricted to existing city pairs.

"Let's say Jet goes from five places in India to Abu Dhabi, then you give them 10 cities to fly from. There cannot be an unhealthy development taking place in the country. Who approves the schedule? We do," the newspaper quoted a ministry official as saying.

A senior ministry official told Firstpost it is not possible to withdraw permission to Jet's extensive domestic route network to limit Etihad's access to small towns and cities in India, whatever AI might say.

But he said that a "way will have to be found" by which interests of both airlines can be safeguarded. Short of a miracle or some major arm twisting of Jet-Etihad combine by the ministry, one fails to see how this please-all situation would be created.

Now, after Kingfisher and Air India have had their share of the limelight at the behest of a long winded and complicated deal between Jet and Etihad, its the turn of airline employees.

Agency reports suggest that over 700 technicians at Jet Airways have been begun protesting against "extreme work conditions". The employees are wearing black badges to highlight their cause.

A story in The Hindu today quotes unnamed employees as saying that Jet Airways makes them work extended hours without breaks to ensure planes are available for flights.

They have also accused the airline of paying them paltry salary of around Rs 15,000 per month, not commensurate with the work that they put in.

Jet Airways has categorically denied these allegations.

"We have been made to work for up to 12 hours a day without any break and that too in extreme climatic conditions. We are not provided with basic infrastructure. We are paid one-tenth of the salary given to our counterparts working in Gulf-based airlines. The meagre salary comes 15 days late," said an employee, who did not wish to be named.

The comparison with Gulf airlines apart, one wonders why these protests have come now, when the deal is close to be clinched. This in no way means that employee worries are not genuine or that employees do not have the right to protest injustice.

But the timing of protests shows perhaps they are hopeful of getting a more patient ear from an airline which is engaged in a fight for survival through the deal with Etihad.

Jet has lost market share in the last several months, is in losses and faces a mountain of debt. So not only is a deal with Etihad a sensible thing to do, it may be the only route for Jet-which not long ago was the country's largest airline by passengers-to survive. If only competitors and employees will let it.

by Sindhu Bhattacharya

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