To Co-Pilot

Aviation Sector In India

opened for Foreign Airlines

Impact of FDI on Aviation Industry

Airlines
The move is expected to provide much-needed cash flow to private airlines It is likely to result in an improvement in technology, both in terms of ground handling and flight operations

Government
Implementing the proposal will mean likely political opposition from the Trinamool Congress

Passengers
Fares may become competitive

Ambitions of Indian airports to Quality of service emerge as international hubs would may go up due to be undermined because foreign airline competition investors will want to divert the passenger traffic to their own hubs abroad Security is another concern. The government will have to keep a tab on dubious investors entering India through this route Since FDI rules not applicable to Air India, it will lose its market share Better international connectivity

It will bring in the best international management practices There are also fears that this may lead to a takeover of Indian carriers

FDI impact on Jet

15th September, 2012 - Announcement to allow Foreign Airlines to invest in Domestic Airlines(49% FDI) 19th 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 Revenues Net Income / (Loss) EBITDAR Jet Airways 3.1 billion (89 million) 393 million Etihad Airways 4.8 billion 42 million 753 million

Seat Factor Passengers

78.80% 16.85 million

78.20% 10.2 million

Jet-Etihad vis-a-vis

Valuation Multiples
Peer Group Enterprise Value (in USD thousands) EV / EBITDA LTM FY 1

Jet Airways Ltd. Air Asia BHD

Air Arabia Jazeera Airways Alaska Air Group Inc. JetBlue Airways Corp. GOL Linhas Aereas Inc. SpiceJet Ltd.

3,137,465 4,813,204
1,432,540 891,790 3,718,953 3,894,598 2,875,957 497,030

9.55x 7.90x
7.90x 8.31x 3.99x 5.66x 8.26x 10.31x

9.59x 7.51x
6.86x 7.83x 3.84x 5.24x 6.90x 10.11x

Change in Shareholding Pattern

Stock Price Movements

WinWin Situation

Benefits To Be Derived
Jet Airways
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

Etihad
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. 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.

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.

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

SEBI Inclusion 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.

Thank You.!