A delegation of the Abu Dhabi-based carrier Etihad Airways, which is expected to buy stake in Jet Airways, will meet Commerce and Industry Minister Anand Sharma this week.
“They (Etihad team) will be meeting me on January 31,” Sharma told reporters here on the sidelines of CII’s annual Global Partnership Summit.
The proposed meeting comes in the backdrop of Jet Airways stating earlier this month that it was in talks with Eithad regarding a potential investment in the Naresh Goyal-owned carrier.
The issue was also understood to have come up during the bilateral meeting Sharma had with UAE Foreign Trade Minister Sheikha Lubna Bint Khalid Al Qasimi.
Unconfirmed reports said that Jet Airways was likely to sell 24 per cent of its equity to the major Gulf carrier, indicating that crucial issues relating to the stake sale have been sorted out between the two airlines.
Recently, Jet Airways informed the Bombay Stock Exchange that Jet and Etihad were in discussion regarding a potential investment by the latter. In a filing to the BSE on January 3, Jet said “discussions have commenced recently pursuant to the liberalised Foreign Direct Investment Policy which permitted foreign investment in the shares of an Indian airline.
If the proposal goes through, this would be the first investment by a foreign carrier to pick up stake in an Indian airline following the liberalisation of the FDI policy in aviation.
Both airlines are learnt to have appointed global consultants as they want the investments to be on a sound footing, given the high operating costs in India.
Etihad has in the past two years picked up stake in several international carriers including airberlin, Virgin Australia, Air Seychelles and Aer Lingus.
When Etihad was set up in 2003, it had sought the help of the Naresh Goyal-owned carrier to set up its systems and Jet had provided assistance with its specialists in various fields of aviation operations. Unconfirmed reports had then said Mr. Goyal had also invested some money in the Gulf carrier.
A major reason for Mr. Goyal proposing to dilute part of his shareholding in Jet from 80 per cent was the recent order of the Foreign Investment Promotion Board to bring it down to the regulatory levels. Jet and Etihad already have a code—sharing agreement.
“This deal will be profitable to both the airlines. Jet can gain larger market share, while Etihad will get a major exposure in India and also strengthen its position in West Asia,” an aviation analyst said.
