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Gulf Air, Kuwait Airways pull out of Jet Airways

Gulf Air and Kuwait Airways have decided to sell their stake in Jet Airways, a private domestic airline in India, to their Indian partner, the Gulf News Agency said on Thursday.

The decision is in keeping with the Indian government's policy under which foreign airlines are barred from holding any stake in domestic carriers.

On April 17 this year, the Indian civil aviation ministry had formally asked all private carriers to disinvest any stake held by foreign airlines, directly or indirectly.

An agreement on the sale and the break-up of the three-way partnership was reached at a meeting attended by the chairmen of the three companies in Manama, Bahrain, on Wednesday, the report said.

"Gulf Air, Kuwait Airways and Jet Airways... have reached a friendly agreement to liquidate a tripartite partnership agreement and Gulf Air and Kuwait Airways will sell their shares in Jet Airways to the Indian partner," it said.

The agreement became effective on Wednesday, the Gulf News quoted Sheikh Ahmed Bin Saif al Nahyan, chairman of Gulf Air, as saying.

The meeting was also attended by Kuwait Airways Chairman Ahmed Hamad al Mishari and Jet Airways Chairman Naresh Goyal.

The report said the meeting discussed the Indian government's policy and agreed that Goyal should buy out the stock held by the two Gulf airlines.

Gulf Air and Kuwait Airways held 20 per cent of the equity each in Tail Winds, the holding company of Jet airways, registered in the Isle of Man. The acquisition of the shares will be funded by international banks.

Last month, the chairmen of the three airlines had held a meeting in this regard with Civil Aviation Minister C M Ibrahim in New Delhi.

Ibrahim is understood to have told them that the policy on not allowing foreign airlines to invest in domestic carriers was "final and irrevocable."

A Gulf Air spokesman said the three airlines had, at Wednesday's meeting, reaffirmed their keenness to continue close cooperation in the fields of marketing, operations and technical matters.

Gulf Air is equally owned by the governments of Abu Dhabi, Bahrain, Oman, and Qatar.

Meanwhile, the government of India proposes to enact a new law more in tune with the changing civil aviation scenario, replacing the Aircraft Act 1934 which has lost its relevance.

Also, a comprehensive document laying down a national civil aviation policy is now if final stages and will be circulated for public debate, Anil Baijal, joint secretary in the ministry of civil aviation, said at the Associated Chambers of Commerce and Industry of India (Assocham) seminar on 'Open Sky Policy: Are We Ready For Take-Off.'

On the merger of Air India and Indian Airlines, it was stated that a common board has been constituted and various models of working together are being tried and a decision would be taken in due course.

Responding to the question of disinvestment of equity of Indian airlines, the joint secretary indicated the government has accepted the recommendations of the Vijay Kelkar Committee, according to which Rs 4.75 billion additional funds would be inducted by the government in the first phase.

With the increase in profitability, the airlines will go in for a public offering of Rs 7 to 8 billion, bringing down the government equity to 50 per cent.

UNI