Legal Bid against Etihad’s stake in India’s Jet Airways end

The Jet Airways and Etihad Airways’ partnership has been a long and winding road, and it’s finally come to an end. In 2013, Jet Airways announced that it was selling a 24% stake in the airline to Etihad Airways for around INR26.7 billion rupees (USD325 million). This strategic alliance was designed to expand the networks. And, the reach of both airlines would funnel traffic through Abu Dhabi.

Unfortunately, the deal quickly became embroiled in controversy. Subramanian Swamy, a BJP political leader, commenced legal action and argued. This deal was against the public interest and would benefit Etihad at the expense of local carriers. He even called on India’s Criminal Bureau of Investigation (CBI) to look into the approvals process behind the plan.

In the end, the deal went through and the alliance was formed. However, it would eventually come back to haunt Etihad, with investments made in many airlines going bad, including Jet Airways. The Indian carrier ceased operations in April 2019 and was sold during a restructuring process. With Etihad losing its stake and the USD325 million it paid for it.

Last week, the ten-year-old legal challenge to the alliance finally came to an end when the petitioner withdrew his application. Subramanian Swamy told the Supreme Court that he wished to withdraw the application, noting that the equity alliance was now over. The court dismissed the application but noted that Swamy could refile if there was ever any new cause for action.

What started out as a promising partnership between Jet Airways and Etihad Airways ultimately ended in failure, leaving both airlines in a much worse position than when they started. The legal challenge to the alliance may have finally been put to rest. But the fallout from the failed investment will likely be felt for years to come.