DDN Correspondent

In a major boost for Jet Airways, the Foreign Investment Promotion Board (FIPB) today cleared the Rs 2058 crore deal struck by Jet Airways and Etihad Airways, making India the proposed air hub for Jet-Etihad.

The FIPB however, ruled that security clearances are needed before making any foreign appointment. It may be recalled that the FIPB had already held a meeting to discuss the deal in June and at that time it had asked the interested parties to provide information on who would have "effective control."

As per the new arrangement, the 12-member board will have two directors from Eithad, while earlier the Abu Dhabi-based airline had proposed to have three directors. Etihad's directors will be of "investor board" category, while four "promoter board" directors will be nominated by Jet.

The deal will make India the hub of commercial and air operations in India. The Cabinet Committee on Economic Affairs will now discuss the deal and it will come into effect only after getting clearance from here.

Experts maintain that the success of this deal would prompt other international airlines to invest in India’s ailing aviation sector.