×

Maintenance Repair & Overhaul Space Air Cargo

Home- Stories

Jet Completes Deal With Etihad

: Dec 6, 2013 - : 9:04 am

New Delhi: India’s Jet Airways has completed an agreement to sell 24% stake in Abu Dhabi-based Etihad Airways, becoming the first cross border transaction in the Indian aviation sector since last year’s change to the country’s ownership laws.
The confirmation of the nearly $330 million-worth deal comes after all necessary regulatory approvals were obtained by both airlines from Indian authorities on Nov. 12, following which the two sides closed the transaction on Nov. 20.
Under the strategic equity alliance signed in April, the Middle East carrier will subscribe to 27.3 million new shares of Jet at 754.74 rupees ($13.92) per share, an official at Jet Airways says.
Etihad’s overall commitment to Jet includes an injection of $220 million to create and strengthen a wide-ranging partnership between the two carriers.
Etihad also paid $70 million to purchase Jet’s three pairs of slots at London HeathrowAirport through a sale-leaseback agreement announced earlier this year. The slots are currently being utilized by Jet to operate London services.
Majority ownership of Jet Airways will remain with Indian nationals and Naresh Goyal, Jet’s founder and non-executive chairman, will hold 51% of the airline after the deal, which is subject to shareholder approval. Jet’s board of directors has approved the deal.
The deal calls for Jet to establish a gateway in Abu Dhabi, and expand its reach through Etihad’s network.
“The infusion of foreign direct investment in the aviation sector will result in economies of scale, grow traffic at our airports, and create job opportunities, Jet Airways Chairman Naresh Goyal says.
He says the partnership between the two airlines will “commence immediately” with a view to “enhance connectivity for tourists, business travelers and Indian families.
Following the closure of the deal, the two airlines also announced appointment of Etihad President and Chief Executive Officer James Hogan and its Chief Financial Officer James Rigney as additional directors on the board of directors of Jet Airways.
“By linking our two networks and adding new flights, new routes and more code-share options, travel to, from and within India will become much easier,” Hogan says.
In September, Etihad announced plans to raise its passenger volume and flights to India over the next few months. The Abu Dhabi-based airline is also assessing orders for a range of aircraft from Boeing and Airbus.
With the Indian government changing its foreign direct investment rules in September of last year to allow foreign carriers to own up to a 49% stake in domestic airlines, foreign carriers have been evincing interest in the Indian aviation sector.
In September, the Tata conglomerate signed a deal with Singapore Airlines to launch a full-service airline in India, under which Tata will own 51% of the new carrier; the Singaporean operator will hold the remaining 49%.
The proposed airline is in addition to Tata Group’s plan to partner with Malaysian low-cost airline AirAsia and Telestra Tradeplace to launch a low-cost Indian airline.

 

MORE NEWS

Headquartered in Singapore with reporters spread across all major regions, GBP Aerospace & Defence is a leading media house that publishes three publications that serve the aerospace and defence sector - Asian Defence Technology, Asian Airlines & Aerospace and Daily News. Known industry-wide for quality journalism, GBP Aerospace & Defence is present at more international tradeshows and exhibitions than any other competing publication in the region.
For over three decades, our award-winning team of reporters has been producing top-notch content to help readers stay abreast of the latest developements in the field of commercial aviation, MRO, defence, and Space.

Popular Posts

Copyright 2024. GBP. All Rights Reserved.

Home Defence & Security Space Commercial Aviation Maintence Repair & Overhaul Daily News Events About Us