MUMBAI: Jet Airways and Etihad Airways are in discussions to rope in a third partyan Indian entity which will partner Etihad in buying a majority stake and management control in Jet, said a person aware of the discussions.He didnt elaborate names but said private equity players have been approached.In line with its policy, Jet Airways does not comment on speculation, said an airline spokesperson in response to an email seeking comment.Jet Airways chairman Naresh Goyal is wooing Abu-Dhabi based Etihad to increase its stake in his airline from 24% currently to as much as 49%.
But a foreign player cant have management control in an Indian airline and that has spurted the search for an Indian partner.Goyal earlier this month, flew to Abu Dhabi meeting not just the Etihad management but also the royal family including crown prince Mohammed bin Zayed bin Sultan al-Nahyan.These were meetings that helped resume discussions between the two airlines after Etihad had initially made its disinterest for further investment clear.
Etihad, also has the right of first refusal, a crucial advantage at a time when the Jet Airways founder is scouring for investors.On Monday, in a significant move, Jet Airways announced the induction of Robin Kamark, CEO of Etihads equity partners, its strategic airline investments, on the board of Jet Airways.Kamark will replace Harsh Mohan, Etihads current nominee in Jets board.
Etihad currently owns 24% of Jet Airways.The nomination comes even as Jet, desperate and struggling for financial aid, has approached the Abu Dhabi-based airline for a cash handout in the form of soft loans and a possible stake purchase.
The airlines chairman Naresh Goyal is willing to cede control, giving Etihad up to a 49% stake.
Tata Sons had been in talks with Jet for a stake purchase but its board cautioned it to complete due diligence without venturing into an investment proposal.
The Tata group has now receded to the background, with Etihad emerging as the main contender to rescue the airline.Kamarks appointment is significant as he headed Etihads airline investment function till 2017.
Indias second-biggest by market share is battling a financial crisis.
It has delayed salaries, laid off staff, grounded planes and cut flights, been downgraded by credit rating agencies and has been having a tough time allaying lenders fears of a potential default.