The bilateral air services agreement with Abu Dhabi was approved by the cabinet, Farooq Abdullah, federal minister for renewable energy, told reporters in New Delhi today. The accord will more than triple the number of seats carriers can sell on flights between the two countries to about 50,000 per week through 2015 from 13,300 a week now, two government officials who were briefed on the matter said before the meeting.
The agreement will help Abu Dhabi-based Etihad Airways PJSC increase services to India as it seeks to purchase a 24 percent stake in Jet Airways (India) Ltd. (JETIN) to tap travel demand in a market that’s set to become the world’s second-fastest growing by 2016. An investment by Etihad will make it the first overseas carrier to invest in an existing local carrier after India eased ownership rules last year.
In April, Etihad agreed to purchase 27.26 million Jet shares for 20.6 billion rupees ($303 million). The deadline for concluding the stake purchase has been extended to the end of September from Aug. 31, as the carriers await Indian regulatory approval including from the antitrust watchdog, a spokesperson for the Abu Dhabi-based carrier said Sept. 1.
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