Date:31/03/2006 URL: http://www.thehindubusinessline.com/2006/03/31/stories/2006033104490100.htm

Back Panel for full transfer of property in aviation

Our Bureau

New move may clear hurdles for Jet Airways' Sahara buyout

The catch
The acquiring company will not be allowed to lease or sell the properties after acquiring them.

New Delhi , March 30

In a move that should facilitate the eventual buyout of Air Sahara by Jet Airways and help mergers and acquisitions in the domestic airline industry, the Aircraft Acquisition Committee (AAC) of the Ministry of Civil Aviation has proposed allowing 100 per cent transfer of property including aircraft, routes, and parking bays, when one company buys out another.

However, the company that acquires these will not be allowed to lease or sell these properties after acquiring them.

The committee, which includes senior officials from the Ministry and the Directorate-General of Civil Aviation (DGCA), clears proposals relating to acquisition of aircraft.

When asked whether the guidelines had been framed keeping in mind the buyout of Air Sahara by Jet Airways, official sources said: "The guidelines are based on the best international practices followed globally. These have been done in anticipation as there is still no formal request from Jet Airways and Air Sahara."

The policy is likely to be announced next week after it has been cleared by the Ministry of Civil Aviation, the sources indicated.

Jet Airways, which purchased Air Sahara for an enterprise value of $500 million on January 19 this year, is likely to be the immediate beneficiary of the latest guidelines.

The move would also benefit Indian Airlines and Air India; the Prime Minister, Dr Manmohan Singh, recently cleared a proposal for merger of the two airlines.