Singapore fair-trade body questions Jet-Etihad deal

The deal between Jet Airways and the Abu Dhabi-based Etihad Airlines, which has still not quite cleared Indian regulatory hurdles, now faces fresh troubles, as Singapore's fair trade watchdog has begun a scrutiny of the deal to look into any possible violation of its competition laws.

The deal, which involves the acquisition by Etihad and other minor partners of a 24 per cent stake in the Naresh Goyal-promoted Jet Air for about Rs2,060 crore, 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 was finalised late last year after clearances from various Indian regulators, including the Competition Commission of India and the Securities & Exchange Board of India.

However, the deal has now come under the scanner of the Competition Commission of Singapore (CCS), 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 11 July, after which it would make its final adjudication 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 notice said.

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.