Jet, Etihad hold talks, may go down the aisle

The latter is acquiring stakes in airlines across the world is keen on investing in India

Four days after the Union Cabinet allowed foreign carriers to buy up to 49 per cent in the domestic airline companies, a new strategic alliance seems to be on the cards. For the past couple of days, Jet Airways Chairman Naresh Goyal and senior members of the company’s management are holding talks with Etihad Airways officials in Abu Dhabi, fuelling speculation of a possible alliance and investment in the airline.

In 2008, Jet Airways and Etihad had signed a code-sharing agreement. In 2011, Etihad Chief Executive James Hogan had sought the Centre’s approval to include more India-Abu Dhabi routes in its scheme of things. Etihad, which has been acquiring stakes in airlines across the world, is keen on investing in India.

Goyal, once a staunch opponent of opening up the sector to foreign airlines, has now taken a different stance and welcomed the government’s recent decision. Goyal holds 80 per cent stake in Jet Airways through Tailwinds Limited, a foreign-registered company. In August, on the sidelines of the company’s annual general meeting in Mumbai, Goyal had said Jet Airways was an Indian company and he was a non-resident Indian, clarifying the government’s norms on allowing FDI in aviation did not bar his airline from seeking a strategic partner. On equity dilution, he had said, “So far, as it stands, we will be controlling. If the sentiment and the overall situation improves, I will have an open mind to dilute, but have control over the company.” He had, however, clarified he wasn’t immediately seeking a foreign airline partner. “Today, I do not need (FDI). Tomorrow, I may need. There is nothing permanent in business,” he had said.

EYEING THE PIE IN THE SKY

• Jet Airways Chairman Naresh Goyal has welcomed the government’s FDI decision
• For the past few days, Goyal and senior members of the company’s management are holding talks with Etihad Airways officials in Abu Dhabi
• This has fuelled speculation of a possible alliance and investment in Jet
• Etihad, which has been picking stakes in airlines across the world, is keen on investing in India
• Goyal had said Jet was an Indian company and he was an NRI, clarifying the government’s norms on FDI did not bar his airline from seeking

A Jet Airways spokesperson could not be reached for comment and a senior company executive declined to comment. However, another official from the airline ruled out the FDI angle, saying the talks with Etihad could pertain to Jet’s international expansion — adding flights to the Gulf region and seeking to join the Star Alliance. Etihad did not comment for the story.

Etihad has also held discussions with officials from Kingfisher and SpiceJet, which are scouting for funds. “Etihad Airways welcomes the government’s decision to allow foreign investment in Indian carriers. The Indian aviation industry offers tremendous potential, with significant passenger movement on domestic and international sectors,” read an Etihad Airways statement.

“Etihad Airways has identified equity investments in other airlines as an important evolution of its successful partnership strategy. Such investments would be made where Etihad Airways believes the commercial prospects are strong, where there are like-minded business philosophies and where such commitment will be welcomed. If or when we do make further investments of this sort, we will announce those, in line with regulatory and commercial requirements,” the statement added.