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

• 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 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 E n t e r p r i s e V a 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

.

Win–Win 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.

Jet’s 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 Jet’s 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….!