Narayanan's views come on the back of the recently finalised Jet-Etihad deal wherein Jet will sell 27.3 million shares for Rs 754.74 per share. The price is at a 31.7 percent premium to Jet's closing price on Tuesday.
"It is a very positive development. We've had the revised guidelines on foreign direct investment (FDI) for some time now and this is the first and the most significant development after that change late last year," adds Narayanan in an interview ro CNBC-TV18.
Below is the edited transcript of Narayanan's interview to CNBC-TV18.
Q: What are your initial thoughts on the entire aviation sector now that this deal has come through and how game changing could it could be?
A: It is a very positive development. We've had the revised guidelines on foreign direct investment (FDI) for some time now and this is the first and the most significant development after that change late last year. It is going to create a renewed interest amongst several other foreign airlines who are looking to expand in India through equity ownership.
Q: Do you see more deals come through? Many other players including names like SpiceJet have been talking to some formidable players in the Gulf to strike deals. Now that the Jet-Etihad deal has fructified, do you see more deals come through within this calendar year itself?
A: I won't be able to comment on time possibilities but certainly this is going to be a positive development. It sort of enables a faster closure. I am extremely pleased that this has finally gone through.
Q: How do you see the environment changing with respect to the market share dynamics in the Indian aviation business itself?
A: It is too early to say. There are some very competent players and everybody is slogging it out. We have also been reasonably successful having grown the market share from just under 11 percent when the group took control of SpiceJet to almost 20 percent now. So, it is going to take a while before any kind of knowledgeable comments can be made on which way market share gains will get redistributed. The most important thing is, the industry's sentiments are going to be more favourably nuanced amongst foreign suitors now.
Q: On terms of pricing aggression, we have seen the entire aviation space go through this for a while, do you see Jet-Etihad becoming more aggressive in terms of pricing to penetrate the market and then others following suit?
A: I don't think so, because we all saw what happened when pricing turned almost irrational towards the end of FY12. Thankfully, the industry has had a lot more discipline for the past 12 months or so. I don't think anyone is in a condition to do any kind of losing game at this time. So, the industry will continue to be very disciplined.
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