Etihad Airways fined Rs 1crore by CCI

Etihad Airways fined Rs 1crore by CCIThe Competition Commission of India (CCI) on Thursday slapped Abu Dhabi-based Etihad Airways with a penalty of Rs 1 crore for implementing a part of its deal with Jet Airways before getting its approval.

Announced in April this year, the $900-million Jet-Etihad deal has four major parts, viz. Equity in the Indian carrier for $379 million; equity in the carrier's frequent flyers program for $150 million; $300 million for debt financing; and sale & lease-back of three slots at Heathrow Airport for $70 million.

The Abu Dhabi-based carrier had acquired Heathrow slots on 26th of February this year and leased the slots back to Jet Airways. The process of leasing the slots back to Jet Airways was started and completed well before the announcement of the commercial deal. The carrier had not gained any approval for the same from the country's fair play regulator.

Slapping Etihad with the penalty, the CCI said, "The parties consummated LHR transaction without giving notice to the commission. Similarly, the Parties agreed that commercial cooperation agreement shall come into force on 24th April 2013, whereas the notice was given to the Commission only on 1st May 2013."

The Jet-Etihad deal has been encountering controversies ever since its announcement. The BJP-led Opposition criticized it a lot after the civil aviation ministry gave additional flying right of 37,000 seats to Etihad on 24th of April.