On the possible impact on national carrier Air India, which many believe will be worst-hit by the deal, Singh said, “Air India has very limited operations today. If you do not allow other airlines to come wherever they want how will the passengers fly. Air India should look after themselves and gear up.”
Senior government officials pointed out that AI was not equipped to handle the outgoing international traffic alone and it should not be complaining.
“The deal is good for fliers. It is good for civil aviation sector. This will fuel more competition. And, it is better for long-term growth. Air India has to be on its toes,” a senior aviation ministry official said.
Naresh Goyal-promoted Jet Airways announced on Wednesday that it will sell a minority stake to Abu Dhabi-based Etihad Airways for roughly $379 million (around R2,000 crore). The deal is the first since the government in September 2012 permitted foreign airlines to pick up to 49% stake in domestic carriers. Industry experts said the deal would enable Etihad to tap into India’s rapidly growing travel market, providing additional passenger traffic to Etihad’s West Asian, North American and European destinations.