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Thu 1 Aug 2013 09:24 AM

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Dubai’s Emirates said to be in talks with India’s SpiceJet

SpiceJet's CEO Neil Mills departed in July, prompting speculation of investment

Dubai’s Emirates said to be in talks with India’s SpiceJet

Dubai’s Emirates Airline is in advanced negotiations to acquire a stake in Indian low-cost carrier SpiceJet, according to reports.

The Hindu, citing unidentified market sources, said that Chennai-based SpiceJet had also held talks regarding a possible stake sale with Qatar Airways and Kuwait Airways. In July SpiceJet flat-out denied talks with Kuwait Airways after media reports caused its share price to rise by 8 percent.

Debt-laden SpiceJet’s CEO Neil Mills resigned last month, bolstering speculation that the carrier’s shareholders were paving the way for a tie-up with a third party airline. Mills told Arabian Business last year that SpiceJet had held preliminary talks with unspecified Gulf carriers.

Emirates president Tim Clark admitted in a recent interview that the carrier had looked into the possibility of investing in India’s aviation sector. “I have never said no. Of course, we have looked at this. The Indian aviation market is a big cake and Etihad had got a piece, but at least three quarters of the cake is still there, uneaten,” he told Business Line.

Emirates is currently the largest foreign airline operating in India, operating 185 weekly flights to ten destinations. Its share of outbound traffic from the country is about 13 percent. Its weekly seat capacity is 54,200, although it has been lobbying the Indian government for an increase.

An Emirates spokesperson did not immediately respond to Arabian Business’s request for comment on speculation surrounding SpiceJet.

Earlier this week, Abu Dhabi’s Etihad Airways received regulatory approval to acquire 24 percent of India’s Jet Airways, after submitting a modified proposal in terms of how much control it would have over the latter.

That deal, announced in April, was the first example of foreign direct investment from a foreign airline into India’s domestic aviation market, following a change in government regulations earlier this year.

India’s Civil Aviation Ministry also recently handed Abu Dhabi a huge increase in its weekly seat capacity between the UAE capital and a number of destinations in India.

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