PPT on the Jetihad Deal!

1. TIE UP BETWEEN JETETIHAD AIRWAYS

2. THE PRESENTERS: Bhavneet (47)
 Sujatha (48)
 Rajat Omar (49)
 Mohit Banka (50)
 Garima Bansal (51)
 Nitish Bhardwaj (52)
 Prashant (52)
 Vinay Singhla (54)


3. MOHIT

4. AVIATION
INTRODUCTION
Aviation as an infrastructure segment.
 Aviation sector does not only provide
air transport.
 About one-third of world trade (by
value) is delivered by air and about
half of international tourism is
facilitated by air links.
 Civil aviation industry is an important
engine
for
innovation
and
technological progress in a world of


5. INDIAN AVIATION
INDUSTRY




1932: Mr. J.R.D.TATA flies a De Havilland Puss Moth
from Karachi to Bombay as part of the first Tata Sons
Ltd. flight to deliver mail carried by British Imperial
Airways.
1948: Govt. of India acquires 49% stake in Tata
Airlines, designates it a flag carrier and renames it “Air
India International (AII)”.
1953: Tata Group sells majority stake in AII to the
Government of India, nationalizing air transport.
1953: Indian Airlines formed by merging 8 former
independent domestic airlines.

6. MARKET SIZE



Total domestic passengers carried by the
scheduled domestic airlines between January
and April 2013 were 20.289 million, revealed
the official statistics.
No-frill carrier Indigo lead in terms of market
share with 29.8 per cent of the pie, followed by
Jet Airways-JetLite combine at 22.6 per
cent, Spice Jet 19.6 per cent, Air India
Domestic 19.2 and Go Air at 8.9 per cent for
the January-April 2013 period.
The air transport (including air freight) in India
has attracted foreign direct investment (FDI)
worth US$ 449.26 million from April 2000 to

7. DOMESTIC AIRLINES

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


Air India
GoAir Airlines
IndiGo Airlines
Jet Airways
Jet Airways Konnect
SpiceJet Airlines
JetLite (Air Sahara)
MDLR [Murli Dhar Lakh Ram (MDLR) Group]
Airlines*
Jagson Airline*
Paramount Airways*
*Small Privately Owned Airline(s)

8. NAMRATA

9. KEY DEVELOPMENT &
INVESTMENT
 Jet
Airways is in talks with Abu Dhabibased Etihad Airways.
 Jet Airways offering visa procurement
services.
 The Rajiv Gandhi International Airport in
Hyderabad is set to commence „visa on
arrival‟ facility.

10. FDI IN AVIATION SECTOR
So far foreign investors in aviation sector were
allowed to invest up to 49% stake in domestic
airline companies but the criteria for the
investment was that the investor should not be
related to the aviation sector.
 However, now with relaxed FDI norms, foreign
aviation companies are open for the investment in
domestic Indian aviation companies with up to
49% stake


11. BENEFITS

It will provide the much needed cash flow to the domestic
aviation companies.

It will bring in investments in aviation technology.

It will improve the flight operation, ground handling, evolved
safety standards and overall better aviation experience.

Consumers will have wider choice.

International aviation companies will bring the best

12. WHY NOT ALLOW FORIEGN
AIRLNES TO FULLY OWN INDIAN
CARRIERS?
India does not have an open skies policy so it
signs liberal Air Services Agreement (ASA).
 If FDI by foreign airlines is allowed upto
74% many global airlines will want to set up
subsidiary companies in India
 Two investors-Ethiad of Abu dhabi and Air
Asia of Malaysia would rethink their entire
Indian stratergy.


13. BHAVNEET

14. INTRODUCTION TO JET
AIRWAYS

15. JET AIRWAYS







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Incorporated on April 1, 1992.
Commenced operations on May 5, 1993.
Granted scheduled airline status on January 4, 1995.
12 April 2007 Jet Airways bought Air Sahara for $340
million later renamed JetLite.
Jetkonnect launched on May 8, 2009.
Total number of aircrafts 98.
March 2004: Began international operations with
inaugural flight from Chennai to Colombo.
Currently Operations: 50 Domestic destinations and 20
International destinations.
On April 24, 2013, announced a 24% stake sale to
Etihad at $379 million.

16. CHAIRMAN’S PROFILE

MR.NARESH GOYAL

17. MARKET SHARE

18. SUJATA

19. ETIHAD AIRWAYS

20. SNAPSHOT

21. ETIHAD AIRWAYS
Set up by Royal (Amiri) Decree in July 2003.
 Commercial operations in November 2003.
 Etihad has a fleet of 66 aircraft serving 87
destinations in 55 countries.
 Chairman - HH Sheikh Hamed bin Zayed Al
Nahyan
 Chief Operating Officer and President - James
Hogan


22. CHAIRMAN
HH Sheikh Hamed bin Zayed Al Nahyan

23. NETWORK MAP

24. RAJAT

25. ETIHAD AIRWAYS
JET AIRWAYS
JET
MALL
ON
GROUN
D
SERVIC
E
JET
SPARK
CARGO
IN
FLIGHT
EXPERI
ENCE
CARGO
SERVIC
ES
JET
AIRWAS
KONNE
CT
JET
KIDS
JET
ESCAPE
S
JET
MOBIL
E
DIAMO
ND
FIRST
CLASS
ETIHAD
GUEST
ETIHAD
EXPRES
S
COACH
SERVIC
ES
PEARL
BUSINE
SS
CLASS
CORAL
ECONO
MY
CLASS
SERVIC
ES
ETIHAD
CHEUF
FUER
SERVIC
ESS
IN
FLIGHT
ENTERT
AINME
NT
DUTY
FREE
PRODUCTS & SERVICES

26. ETIHAD AIRWAYS
JET AIRWAYS
UNITE
D
AIRLIN
ES
AMERI
CAN
AIRLIN
E
SAFI
AIRWA
YS
ETIHA
D
ALITA
LIA
QANT
AS
AIR
FRANC
E
CODES
HARE
JET
KONN
ECT
AIR
CANA
DA
ALL
NIPPO
N
AIR
ASTAN
A
BRUSE
LLS
AIRLI
NE
CODES
HARE
THALY
S
AIRBE
RLIN
EMIRA
TESSO
UTH
AFRIC
AN
AIRLIN
E
AIR
LINGU
S
ALITA
LIA
AIR
SEYCH
ELLES
ANA
AIR
MALT
A
CODESHARE PARTNERS

27. JET AND ETIHAD
AIRWAYS

28. JET AIRWAYS-ETIHAD
STRATEGIC ALLIANCE
Strategic alliance with Etihad Airways of the
United Arab Emirates.
 The injection of US$750 million covering up to
24% of Jet Airways‟ Share Capital & other parts
through bonds & equity.
 Expansion of existing operations and introduction
of new routes between India and Abu Dhabi.
 Conviniene to customers.


29. VINAY

30. WHAT LED TO THE
DEAL?
INDIA – UAE Bilateral Agreement
(Aviation)
Agreement Validity – 3 yrs.
 Indian population in the Gulf region Saudi
Arabia, UAE and their neighbors. 51.97% of Gulf
populations is Indian.
 More seats allocation to the Indians in India-Gulf
Route.
 Lower Fares and Special Offers to Frequent Flyers.
 Allow designated airlines of each side to have the


31. BENEFITS TO BE
DERIVED
Jet Airways
Etihad
The deal is life saver for Jet, with a huge
debt of Rs.13,282 crore in the fiscal ended
March, 2012. It will not only get USD 750
million but will have access to cheap loans
@3% from Abu Dhabi
To push the deal through, the Indian Govt.
agreed (by way of bilateral agreement with
UAE) to give Etihad permission to fly to
11 more cities in India in addition to 9 it
already lands.
Jet‟s consolidated Net Debt-Equity=97
times. The equity infusion will allow Jet to
pay down the debt & will lead t its DebtEquity falling to 4.3 times. It will result in
int. Saving of Rs.190-200 crore per year.
Etihad may cannibalise the traffic share of
Indian airlines by flying passengers to
various parts of the world through its hub
airport in Abu Dhabi.
Key cost benefits and synergies in fleet
acquisitions, maintenance, joint purchasing
opportunities for fuel, spare parts and
insurance and technology support will
come through. Other areas of cooperation
Much needed entrance in Indian market
with the potential market and steady
growth. Also the number of seats to be
increase three times between India &
UAE.

32. NITISH

33. SYNERGIES TO BE
DERIVED

34. FACTS & FIGURES

35. MAJOR CONCERN OF SEBI
& FIPB

Consent of 3/4th of members majority for
decision.

The agreement has unilateral right and can be
terminated by Etihad any time.

The jet airways headquarters will be shifted to
Abu Dhabi.

Tax Evasive Measure.

36. PRASHANT

37. IMPACT ON ECONOMY,STOCK
MARKET & VARIOUS OTHER
AREAS

Indians working in U.A.E

Lead to the growth of Aviation Sector.

Generation of employment.

Will push the stock of all the airlines upward.

It would ease the pressure of high current account
deficit in long run.

38. TAKE-OFF TROUBLES

April 24 Jet and Etihad sign strategic alliance. The latter agrees to buy a 24% stake in the former
for about Rs 2,060 crore

May 24 Jet shareholders approve stake sale. The airline defers resolution to amend the company‟s
articles of association

May 27 The two airlines amend shareholder agreement to address shareholder and Sebi concerns
on „control‟ and „ownership‟

May 29 & 31 Subramanian Swamy and Jaswant Singh write to the PM against the deal

June 13 PMO writes to the civil aviation ministry to redraft the Cabinet note on Abu Dhabi traffic
rights

June 14 Foreign Investment Promotion Board defers approval to Jet-Etihad alliance

July 2 PMO defends the Abu Dhabi bilaterals and says there‟s no division within the government
on the issue

39. SOLUTIONS



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BoD Composition: 2 Directors for Etihad with Jets 5 and 7
Independent Directors of Indian origin.
Audit Committee member reduced to 1 for Etihad.
Board Decisions to be taken on 2/3rd majority rather than 3/4th as
first drafted.
No change in the Shareholding pattern. Etihad acquire 24% stake
leaving 51% with Goyal and remaining 25% with
others, including institutions and individuals.
Goyal will be designated as the First Chairman of the airline after
Etihad's investment is approved by the Indian Authorities.
Etihad has agreed not to act in concert with Naresh Goyal, while
taking decisions.

40. Thank You….!