Jet-Etihad Deal Positive for Industry: Experts

Some industry players, however, were cautious in their response to the development.

Not wishing to be named, some players expressed apprehension that the move may drive away transit passengers from Indian airports, impacting their own plans of operating in global hubs located in India.

Jet, on its part, said in a statement that both the airlines will expand existing operations and introduce new routes between India and Abu Dhabi, establishing it as a gulf gateway.

Jet said the move would not adversely impact domestic airports, as it would continue to develop Delhi and Mumbai airports as its primary home hubs, connecting them to Asian, European and other regions.

Interestingly, the announcement of the sale of stakes by Jet comes just a day after India and the UAE began negotiations to enhance bilateral air traffic rights on the India-Abu Dhabi sector.

Indian passenger carriers, especially Jet Airways, have sought an exponential increase in seat capacity on the sector.

The existing Bilateral Air Service Agreement (BASA) entitles India-based airlines to offer 13,300 seats per week on the India-Abu Dhabi route.

"There is demand in this sector and it is growing. Indian passenger carriers should use this opportunity. Jet can have several international hubs, these will not drive passengers away from Indian airports. Some passengers will benefit by getting direct flights from smaller airports, rather than travelling to major ones," Lillaney added.

The deal will allow passengers from 23 Indian cities to get direct international flights, while they can also avail the frequent flyer programmes of both airlines.

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