According to a consultancy firm, one of the critical impact of the deal is liberalisation of India-UAE bilateral, which will benefit not only these two carriers, but also Emirates, flyDubai & Air Arabia.
The government has earmarked 40 Tier II and III towns, which have airport infrastructure ready to commence air connectivity upfront.
IndiGo, the country's largest airline by market share, plans to set up a regional airline for connecting small towns using 70-80 seater ATR aircraft.
IndiGo created history in Jan 2011 by ordering 180 Airbus A-320s with a list price of almost Rs 72,000 cr to be delivered between 2016 and 2025.
Flights from New Delhi to Allahabad and nearby cities like Varanasi, Kanpur and Lucknow cost anywhere from Rs 8,400 to Rs 14,455.
For example, a code share agreement between Jet Airways and Etihad Airways for a Delhi-Paris flight would mean that both the airlines could sell seats on the same route.
Etihad Airways, which is widely expected to buy up to 24% stake in Jet Airways, could get equal board representation in the Indian company.
The deal between Jet Airways and Gulf carrier Etihad Airways is unlikely to bring immediate benefits for the foreign partner after it picks up a minority stake or 24% equity in the Indian airline, say people in the government and the industry.
"All states of India help in building airports and regional connectivity is the need of the hour", Ajit Singh said.
Shares of Jet Airways rose 4.26% to Rs 611.85 a share, on the news that the deal is expected to go through in the next ten days.
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