Emirates Airlines, the world’s largest international carrier, has reaffirmed it has no plans to follow Abu Dhabi rival Etihad Airways and bid for a stake in an Indian carrier, the Dubai-based operator’s president said.
President Tim Clark said there were no plans to acquire equity stakes in indebted Jet Airways or Kingfisher Airlines because they lack the control of operations, finances and their workforces that Emirates sees as necessary, Bloomberg reported.
“If the Indians themselves can’t make a go of it - if Vijay Mallya can’t, and Naresh is struggling, and Air India?” Clark was quoted as saying, referring to the bosses of the two Indian carriers believed to be seeking a link up with an international partner to help service their mounting debts.
“If they can’t make it work, then who can?” he added.
Indian regulators in September 2012 passed a law allowing foreign carriers to invest in the country's domestic aviation sector for the first time, although Emirates was quick to distance itself from any possible tie-up, saying it had "no plans" to acquire any stake.
Etihad Airways is believed to be close to making a decision within the next few day on investing in an Indian carrier, with Jet Airways believed to be the favourite.
Etihad, seeking to widen operations in India and other Asian markets, is in the final stages of talks to buy part of either Jet Airways or grounded rival Kingfisher Airlines, an Indian government official had said on December 17. Both Indian airlines have confirmed that they have held talks with Etihad.
A deal would be the first since the government relaxed ownership rules in September to allow foreign airlines to invest up to 49 percent in a domestic carrier.
Buying into Jet is seen as more lucrative for Etihad as the two carriers already have a code-sharing agreement and could target the market share of state-owned Air India and Emirates Airline, the latter of which dominates routes between India and the Middle East.
But a stake in Kingfisher, which has been grounded after its licences were suspended and whose owner, liquor baron Vijay Mallya, has been looking for an investor for more than a year, would be cheaper.
Jet Airways was set to sign a deal with Etihad valued at around US$440m within six months, a source had confirmed in November.
Kingfisher will need about INR4.25bn (US$77.91m) to restart according to its plan, said Shyamal Acharya, a deputy managing director at State Bank of India, the country's top lender and the lead bank to Kingfisher.