Etihad looks set to make India’s Jet Airways its latest investment opportunity, in a bid that will be seen as a vote of confidence in the loss-making carrier.
Abu Dhabi-based Etihad is believed to be poised to take advantage of a relaxation of rules by the Indian government restricting foreign investment in its airlines. In September, foreign carriers were permitted to buy stakes of up to 49 per cent in the country’s carriers, which are at the mercy of more efficiently-run foreign airlines. This is particularly so from the Middle East due to the amount of migrant labour that flows between the two regions.
The Times of India said that Jet Airways, owned by the multi-millionaire Naresh Goyal, has had staff in Abu Dhabi, including its chief commercial officer, for almost a month while the small print is agreed.
Etihad favours minority investments in its partners and has been on a shopping spree. In the last year, it has bought a 29 per cent stake in Air Berlin, making it the second-largest shareholder in the carrier. It also bought a 40 per cent stake in Air Seychelles and three per cent of Aer Lingus.
Jet Airways is a prospective member of Star Alliance, but Etihad has resolutely avoided joining any global alliance, preferring the approach of taking minority stakes instead.
Separately, Air Asia is reported to be in talks with SpiceJet, the Indian budget carrier which is also loss-making. SpiceJet is owned by the Sun Group, an Indian conglomerate that has US backers.
Report by Gary Noakes