is deepening its relationship with Delta Airlines, which could result in the US carrier picking up a stake in the Mumbai-based carrier.
Jet Airways, in which Abu Dhabi’s Etihad Airways
owns a 24 per cent stake, has adopted a network strategy independent of its investor. At present, the Jet Airways
management is fine-tuning plans for a commercial joint venture with Delta and Air France-KLM. A joint venture allows participating airlines to share revenue and profits on routes.
Sources said there had been exploratory discussions between the managements of Jet Airways
and Delta on an equity investment.
JPMorgan is assisting Jet Airways
to raise funds, including through a possible stake sale. Sources, however, said talks with Delta had not reached the stage of valuation and a formal due diligence had not yet been conducted.
Over the last few months there have been frequent meetings between executives of the two airlines at Delta’s headquarters in Atlanta and in Europe and the two carriers may announce a joint venture in the next couple of months.
Delta has stakes in the Richard Branson-founded Virgin Atlantic, AeroMexico and China Eastern Airlines. An investment in Jet Airways
will provide it access to the fast-growing Indian market. However, it is unclear whether an equity investment will materialise, given Delta’s animosity towards Gulf carriers on the issue of open access to the US market. An investment in Jet Airways
will bring Delta and Etihad on the same table.
Separately, Jet Airways
Chairman Naresh Goyal is talking with the Etihad management for fund-raising.
Jet Airways’ stock rose 3.35 per cent on Monday on talks of a stake sale to close at Rs 582. The airline's market capitalisation was Rs 6,621 core at Monday’s closing price. There are enough indications of Jet Airways’ growing ties with Delta. The Mumbai-based airline
has hired Vinay Dube, a senior executive from Delta, as its new chief executive officer. Also, Delta has leased a slot at the congested Heathrow airport
to enable Jet to start a third daily service between Mumbai and London. "As a policy, Jet Airways
does not comment on speculation," an airline
spokesperson said. A Delta spokesperson said, "We cannot comment on any future investments."
Etihad picked up a 24 per cent stake in Jet Airways
for Rs 2,079 core in 2013. The two carriers have an extensive code share partnership and the Abu Dhabi-based airline
has assisted Jet Airways
in raising loans from banks in the Gulf. However, relations between the two partners turned cold several months ago. This coincided with Jet Airways’ growing ties with Air France-KLM and Delta. Jet Airways
has made Paris, Amsterdam and London its European gateways and feeds traffic to its European partners and Delta.