Don't see SC order impacting Jet-Etihad deal: CAPA

Supreme Court’s (SC) order on the Jet-Etihad deal is along expected lines and is unlikely to impact the deal, says Kapil Kaul of CAPA.

In response to public interest litigation (PIL) by BJP leader Subramanian Swamy, the Supreme Court today sought Centre's response on the approval given to Jet-Etihad Airways deal. In his plea, Swamy had said that India-UAE bilaterals were tweaked only for the Jet-Etihad deal. The stock tanked 3 percent after the court's notice. Also Read: No issues with Tata-Singapore Air deal, says Ajit Singh Below is the edited transcript of Kapil Kaul’s interview with CNBC-TV18 Q: The Jet-Etihad deal seems to be froth with turbulence even after it got the green signal from the cabinet recently, now this Public-Interest Litigation (PIL). How much of a setback could this be for the deal? A: The deal is a done deal and the only thing pending was the PIL which Subramanian Swamy had put in the court. Today’s direction of the court doesn’t stay the deal, but is asking for more details from all concerned parties. So, to some extent it is on expected lines because I do not think without proper discussion court would have stayed. I do not think there was anything else expected from the court. Q: You think operationally this is a done deal and now it is just a matter of legal formalities of the centre responding back to the Supreme Court and the deal itself can proceed? A: I think the deal was operational even before Sebi had given its conditional approval before Cabinet Committee on Economic Affairs approved it because there is a new CEO, there is a very large contingent of Etihad team, the next steps are being planned and executed, so the deal is already operational. Supreme Court’s decision today was not stay, but  sought for details, this would mean that the work would go on unless and until something contradictory emerges out of the arguments from the government. I do not see any problem to the deal as of now. Q: What does this mean for the other deals that are going on in the aviation space because Mr. Swamy has raised objections with the AirAsia India deal as well? Could this have a bearing on other aviation deals that are in the works at this point? A: I do not see anything significant in the PIL against AirAsia because it is primarily a question of whether foreign direct investment (FDI) is allowed for joint ventures. But, the government can clarify it and that will more or less settle the matter. With respect to the Jet-Etihad deal, if you see Mr. Swamy’s presentation; it is very structured and very detailed. The court could not have just rejected the PIL. It had to take cognizance of that. But the intervention of court was inline with what was expected because the deal is approved by the government. I do not see any problem with AirAsia deal as such, but there might be some facts that might emerge out of Jet-Etihad deal, but overall I do not see a problem with both the deals.