Abu Dhabi-based Etihad Airways is reportedly in talks to take a
minority stake in India’s Jet Airways, according to a Reuters report.
Etihad—which has taken stakes in several carriers including Air Berlin, Air Seychelles and Virgin Australia—is said to be taking advantage of a recent ruling allowing foreign airlines to buy up to 49% equity in Indian carriers.
There is also speculation about another deal between LCC SpiceJet and Malaysian carrier AirAsia. The share price of the airline,owned by media tycoon Kalanithi Maran, has increased more than 10% on the possibility. However, AirAsia CEO Tony Fernandes tweeted that his airline has not submitted any such bid for the Indian carrier. SpiceJet CEO Neil Mills said there is definite interest from foreign airlines. However, he cautioned that such deals take a lot of time.
News of the negotiations came from a senior Indian government official with knowledge of the discussions, according to Reuters. The unidentified official referred to the proposed link-up between Etihad and Jet Airways, saying: “The talks are on. This is more or less final. It may take around a month-and-a-half. This deal is not just about investment, but also technology and partnership in many other ways,” he added, without giving further details.
At current share prices, a 49% stake in Jet Airways would be valued at INR24.3 billion ($437 million).
Jet’s market share and load factors have been falling from the beginning of 2012. The airline, which operates a full-service and a low-cost product, has been strapped for cash for the past two to three years. Ironically, its founder Naresh Goyal had strongly lobbied against allowing foreign airlines to invest in Indian carriers.
Etihad—which has taken stakes in several carriers including Air Berlin, Air Seychelles and Virgin Australia—is said to be taking advantage of a recent ruling allowing foreign airlines to buy up to 49% equity in Indian carriers.
There is also speculation about another deal between LCC SpiceJet and Malaysian carrier AirAsia. The share price of the airline,owned by media tycoon Kalanithi Maran, has increased more than 10% on the possibility. However, AirAsia CEO Tony Fernandes tweeted that his airline has not submitted any such bid for the Indian carrier. SpiceJet CEO Neil Mills said there is definite interest from foreign airlines. However, he cautioned that such deals take a lot of time.
News of the negotiations came from a senior Indian government official with knowledge of the discussions, according to Reuters. The unidentified official referred to the proposed link-up between Etihad and Jet Airways, saying: “The talks are on. This is more or less final. It may take around a month-and-a-half. This deal is not just about investment, but also technology and partnership in many other ways,” he added, without giving further details.
At current share prices, a 49% stake in Jet Airways would be valued at INR24.3 billion ($437 million).
Jet’s market share and load factors have been falling from the beginning of 2012. The airline, which operates a full-service and a low-cost product, has been strapped for cash for the past two to three years. Ironically, its founder Naresh Goyal had strongly lobbied against allowing foreign airlines to invest in Indian carriers.
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