Jet Airways expects deal with Etihad in a week: executive

NEW DELHI Thu Jan 31, 2013 8:19pm IST

1 of 2. James Hogan (L), chief executive of Abu Dhabi's Etihad Airways, Ahmad Ali-al-Sayegh (2nd L), a board member of Etihad Airways, India's Civil Aviation Minister Ajit Singh (C) and Naresh Goyal (R), Chairman of Jet Airways, pose after their meeting in New Delhi January 31, 2013.

Credit: Reuters/Mansi Thapliyal

Stocks

   

NEW DELHI (Reuters) - Jet Airways(JET.NS) expects to finalise a stake sale deal with Abu Dhabi's Etihad Airways in a week or so, an executive at the airline, who declined to be named, said on Thursday.

The Civil Aviation Minister Ajit Singh said earlier on Thursday, after meeting the top executives of the two airlines, that Etihad was in talks with Jet for a potential investment in the carrier.

The terms of the possible deal have not been disclosed, but a government source said earlier this month Etihad was in talks to pick up a 24 percent stake in Jet for up to $330 million.

"The government's role is to make sure that whatever agreement they come to is within the regulatory framework," Singh told reporters after the meeting, declining to give details of the deal.

Top executives at the two airlines are in the Indian capital to meet the civil aviation and trade ministers and senior officials.

Separately, an official at India's trade ministry, who declined to be named as he was not authorised to speak to the media, said Etihad would soon apply to India's foreign investment approval authority for investing in Jet.

The Jet deal, if closed, will be the first since India relaxed ownership rules in September last year and allowed foreign carriers to buy up to 49 percent in domestic carriers that are battling stiff competition and high operating costs.

The aviation sector has been abuzz with talks of stake sales to global carriers since the ownership rules were eased.

But investment bankers don't expect a slew of foreign carriers striking deals in Asia's third-largest economy due to worries about the sector's billions of dollars of debt and high costs of operations.

Jet shares rose as much as 3.4 percent during the day on Thursday to 614.80 rupees. The stock has nearly doubled in the last three months on speculation about the stake sale talks with Etihad.

Etihad's deal with Jet made operational sense, analysts have said, as both carriers already have a codeshare pact allowing them to rapidly ramp up the number of flights on lucrative Gulf-India routes and challenging Dubai-based Emirates Airline.

Nearly 1.5 million Indians work in the United Arab Emirates, which include Abu Dhabi and Dubai, and millions more work in Saudi Arabia, Oman, Bahrain and Kuwait.

The deal with Etihad also gives Jet cash to pare some of its debt. The investment will also put it on stronger footing to compete with state-owned Air India Ltd on domestic routes that feed into the flights to and from the Gulf.

(Reporting by Anurag Kotoky; Writing by Sumeet Chatterjee)

Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Republic Day

Reuters Showcase

RK Laxman Dead

RK Laxman Dead

'Common Man' cartoonist RK Laxman dead at 93  Full Article 

Banking Revolution

Banking Revolution

India turns to corner shops, mobile phones for banking revolution.  Full Article 

Nuclear Group

Nuclear Group

China urges India to take steps to satisfy standards of NSG  Full Article 

Gold Market

Gold Market

Chinese gold demand holds up ahead of holiday, Indian buying weak  Full Article 

India-U.S. Relations

India-U.S. Relations

Column - U.S. and India should join to balance China's rise  Full Article 

Padma Bhushan

Padma Bhushan

India honours Bill Gates with civilian award  Full Article 

Fashionable Modi

Fashionable Modi

When Modi met Obama, his name was all over - his suit  Full Article 

New Greek PM

New Greek PM

Greek leftist Tsipras sworn in as PM to fight bailout terms  Full Article 

Australian Open

Australian Open

Venus fireworks illuminate Australia Day  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage