UPDATE 2-UAE's Etihad closer to deal with India's Jet Airways

Mon Feb 4, 2013 7:53pm IST

Stocks

   

* To present due diligence results to board - Etihad CEO

* CEO Hogan says no plans to cancel Boeing Dreamliner orders

* No talks with Alitalia beyond code sharing

* No plans to issue bonds - Etihad CFO

By Stanley Carvalho and Raissa Kasolowsky

ABU DHABI, Feb 4 (Reuters) - Etihad Airways is close to taking a stake in India's Jet Airways 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 and Qatar Airways. The Gulf carrier has taken stakes in Virgin Australia and Aer Lingus and raised its shareholding in Air Berlin 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 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 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.

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

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Election 2014

Election 2014

Kashmiris wary as Modi challenges for power.  Full Article 

Facebook's Performance

Facebook's Performance

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

Earnings Season

Earnings Season

Bharti Infratel Q4 net profit jumps 64 percent.  Full Article 

Monsoon Forecast

Monsoon Forecast

South Asia monsoon seen below-average to average in 2014 - WMO.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

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