To Co-Pilot

Aviation Sector In India

opened for Foreign Airlines
Impact of FDI on Aviation Industry
Airlines Government Passengers
The move is expected to
provide much-needed cash
flow to private airlines
Implementing the proposal will mean
likely political opposition from the
Trinamool Congress
Fares may become
competitive
It is likely to result in an
improvement in technology,
both in terms of ground
handling and flight operations
Ambitions of Indian airports to
emerge as international hubs would
be undermined because foreign airline
investors will want to divert the
passenger traffic to their own hubs
abroad
Quality of service
may go up due to
competition
It will bring in the best
international management
practices
Security is another concern. The
government will have to keep a tab on
dubious investors entering India
through this route
Better international
connectivity
There are also fears that this
may lead to a takeover of
Indian carriers
Since FDI rules not applicable to Air
India, it will lose its market share
FDI impact on Jet
15
th
September, 2012 - Announcement to
allow Foreign Airlines to invest in Domestic
Airlines(49% FDI)
19
th
September, 2012 - Jet Airways and Etihad
Airways are in discussions for a possible deal
that could see the Middle-Eastern carrier pick
up a minority stake in Jet

Comparison of Financials
Particulars Jet Airways Etihad Airways
Revenues 3.1 billion 4.8 billion
Net Income / (Loss) (89 million) 42 million
EBITDAR 393 million 753 million
Seat Factor 78.80% 78.20%
Passengers 16.85 million 10.2 million
Jet-Etihad vis-a-vis
Valuation Multiples
P e e r G r o u p Ent e r pr i s e Va l u e E V / E B I T D A
(in USD thousands) LTM FY 1
Jet Airways Ltd. 3,137,465 9.55x 9.59x
Air Asia BHD 4,813,204 7.90x 7.51x
Air Arabia 1,432,540 7.90x 6.86x
Jazeera Airways 891,790 8.31x 7.83x
Alaska Air Group Inc. 3,718,953 3.99x 3.84x
JetBlue Airways Corp. 3,894,598 5.66x 5.24x
GOL Linhas Aereas Inc. 2,875,957 8.26x 6.90x
SpiceJet Ltd. 497,030 10.31x 10.11x
Change in Shareholding
Pattern
Stock Price Movements
.
WinWin Situation
Benefits To Be Derived
Jet Airways Etihad
The deal is life saver for Jet, with a huge debt of
Rs.13,282 crore in the fiscal ended March, 2012. It
will not only get USD 600 million but will have access
to cheap loans @3% from Abu Dhabi
To push the deal through, the Indian Govt. agreed
(by way of bilateral agreement with UAE) to give
Etihad permission to fly to 11 more cities in India in
addition to 9 it already lands.
Jets consolidated Net Debt-Equity=97 times. The
equity infusion will allow Jet to pay down the debt &
will lead t its Debt-Equity falling to 4.3 times. It will
result in int. Saving of Rs.190-200 crore per year.
Etihad may cannibalise the traffic share of Indian
airlines by flying passengers to various parts of the
world through its hub airport in Abu Dhabi.
Key cost benefits and synergies in fleet acquisitions,
maintenance, joint purchasing opportunities for fuel,
spare parts and insurance and technology support
will come through. Other areas of cooperation
include joint training of pilots, cabin crew, and
engineers and consolidation of Jets loyalty program
me.
Much needed entrance in Indian market with the
potential market and steady growth. Also the
number of seats to be increase three times between
India & UAE.
Synergies to be Derived
The Making Of A Giant

Take off Turbulences
Many clauses changed in pact, but Mideast carrier
retains edge

Etihad has to maintain a minimum 15%
shareholding at all times. This change is
intended to align Etihad's power to appoint
three directors with its shareholding
The nominations committee also has the
exclusive authority to appointment
independents and the CEO, according to
the shareholders agreement. The
committee will have five members, with
Jet and Etihad nominating one person
each. The three other members will be
independent directors, who will be
appointed by the board.
SEBI Inclusion
Thank You.!