In a move which would affect the Jet-Etihad deal, or start-up carriers like Tata-SIA and AirAsia India, the
Directorate General of Civil Aviation (DGCA) has passed a new directive that foreign airlines or investors would not have the right to control the management of an Indian carrier.
The regulator has given effect to amendments in a rule relating to grant of flying permits to new airlines in the country, official sources told the Moneycontrol.com.
The DGCA has stipulated that a scheduled Indian airline cannot enter into an agreement with a foreign investing institution or a foreign airline, which could give these foreign entities the right to control the management of the domestic operator. It has also made it clear that such foreign entities could have representation on the Board of Directors of the Indian airline company, but not more than one-third of the total number, the sources said.
The revised CAR also makes in mandatory for the applicant airline firm to demonstrate adequate organisation, ground handling and maintenance arrangements, training programme and method of control and supervision of flight operations, before they get an Air Operator’s Permit or flying license.
Jet Airways stocks slips
Jet Airways stock price on 16 April, 2014 closed at INR274.70, down INR16.4, or 5.63 percent. The 52-week high of the share was INR688.60 and the 52-week low was INR210.25. The latest book value of the company is INR-27.75 per share. At current value, the price-to-book value of the company was -9.90.