Jet Airways, Etihad may formally notify govt on deal next week

Etihad Airways, the United Arab Emirates' national airline, and Jet Airways, India's largest private carrier, are expected to formally notify the government about their proposed equity partnership next week, said a Civil Aviation Ministry, speaking to Business Today on Wednesday.

Jet Airways Chairman Naresh Goyal and Etihad President and CEO James Hogan have only verbally informed the Ministry of Civil Aviation about Etihad's intent to pick up a stake in Jet, said the official.

Etihad, which operates 70 aircraft, is keen to pick up a 24 per cent stake in Jet. The deal value, going by various reports, is said to be in the region of Rs 1,600 crore ($300 million).

The Gulf-based airline bought a 40 per cent stake in Air Seychelles in January 2012. It also holds stakes in Air Berlin (Germany), Virgin Australia (Australia) and Aer Lingus (Ireland). Etihad's equity partnerships and code shares with other airlines delivered more than $600 million in revenues in 2012.

The unlisted UAE carrier reported revenues of $4.8 billion in calendar year 2012, registering a 17 per cent increase over 2011. Net profit was at $42 million, surging 200 per cent over the previous year.

If the Jet deal goes through, the investment by Etihad would be the first to happen after the government opened the aviation sector to foreign direct investment (FDI) last September. Investments by a foreign airline in an Indian airline have been capped at 49 per cent.

However, any deal would first have to be cleared by the Foreign Investment Promotion Board (FIPB) before it is processed by the Ministry of Civil Aviation, the official added.

He also clarified that the proposal, if and when it was submitted, would not need market regulator Securities and Exchange Board of India's (Sebi) clearance, as the stake was below 26 per cent.

Shares of Jet Airways were trading 0.65 per cent down at Rs 589.80 in afternoon trade on the Bombay Stock Exchange.