Etihad buys Jet's slots in London; deal around the corner?

Etihad Airways, the UAE's national carrier, may have delayed buying a stake in Jet Airways, but it has bought three pairs of the Indian carrier's Heathrow slots for $70 million (about Rs 380 crore).

The purchase of slots is part of a sale and leaseback agreement signed on February 26. Jet Airways, however, will continue to operate flights to London using these slots.

The deal further strengthens the existing commercial relationship, which came into effect in July 2008, making a provision for code-sharing between the two airlines, a statement from Etihad Airways said. "As previously advised, Etihad Airways continues to progress discussions about further investment in Jet Airways."

Etihad has engaged Jet Airways in talks to buy up a 24 per cent stake in the Indian carrier. The talks, however, have not progressed, with Etihad looking for some more clarity on regulatory issues. The composition of the board is also said to be an issue.

"It appears Etihad and Jet are nearing a deal, and these are only indications in that direction, says Sharan Lillaney, analyst at the Angel Broking Limited.