UAE's Etihad closer to deal with Jet Airways

ABU DHABI Mon Feb 4, 2013 8:44pm IST

A Jet Airways passenger plane takes off from Sardar Vallabhbhai Patel International Airport in Ahmedabad February 1, 2013. REUTERS/Amit Dave

A Jet Airways passenger plane takes off from Sardar Vallabhbhai Patel International Airport in Ahmedabad February 1, 2013.

Credit: Reuters/Amit Dave

Stocks

   

ABU DHABI (Reuters) - Etihad Airways is close to taking a stake in Jet Airways,(JET.NS) the Abu Dhabi airline said on Monday after reporting a tripling in profits for last year.

Such a deal would support the Indian carrier's efforts to woo foreign investors to help cope with fierce competition and high costs in the Indian market.

Etihad, launched in 2003, is on a buying spree to compete with regional rivals Emirates EMIRA.UL and Qatar Airways. The Gulf carrier has taken stakes in Virgin Australia (VAH.AX) and Aer Lingus and raised its shareholding in Air Berlin (AB1.DE) and Air Seychelles.

"We are doing our due diligence (on Jet Airways) in the next week. We will present it to our board and take it from there," Chief Executive James Hogan said at a press conference.

The Jet Airways deal would be the first foreign investment into India's aviation industry since the government relaxed ownership rules in September last year.

This allows foreign airlines to buy up to 49 percent in the country's domestic carriers, many of which are facing stiff competition and high operating costs.

Hogan said he had met with senior Indian aviation officials and ministers last week to understand the new rules of India's foreign direct investment scheme.

"We also wanted to understand the issues that have impacted Indian civil aviation, how they think this will change in the coming years," he said.

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.

Unlisted Etihad reported net profit of $42 million for 2012, compared with $14 million in the previous year.

DREAMLINER

Hogan also said Etihad had no plans to cancel its orders for Boeing's (BA.N) troubled 787 Dreamliner. Etihad has a total of 41 787-9 Dreamliners on order and options for an additional 25 aircraft.

All 50 Boeing 787s are out of action as investigators in the United States, Japan and France look into problems with batteries on the aircraft.

Japan Airlines (9201.T) said on Monday that it would talk to Boeing about compensation for grounding the 787.

"The 787 is a great aircraft, we have no doubt it will be resolved and the aircraft will be up and fine," Hogan said. When asked if Etihad would cancel any Boeing orders, he said: "Not at all."

Hogan also said that the airline has had no discussions with Italian carrier Alitalia beyond code sharing.

Investors in Alitalia are considering selling their shares in the airline, with some pushing for a deal with long-time stakeholder Air France-KLM (AIRF.PA).

The airline's chief financial officer James Rigney also said Etihad had no plans to issue bonds for financing its aircraft deliveries this year.

(Writing by Praveen Menon; Editing by Amran Abocar and Jane Merriman)

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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