By James Mathew
The airline has downplayed a media report that said it may hand "operational reins" to Abu Dhabi's Etihad
The cash-strapped Jet Airways’ saga to get new investors on board to infuse the much needed capital into the company has taken a new twist, with Indian financial daily Economic Times on Monday reporting that Jet founder-chairman Naresh Goyal has opened talks with the Abu Dhabi-based Etihad Airways for a possible sale of controlling stake to it.
Etihad is an existing partner in Jet Airways, holding 24 percent equity in the Indian carrier.
When contacted by Arabian Business, the official spokesman of Jet Airways, however, denied any such move, describing the Indian media story as “totally specylative”.
A business channel in India has also reported last week that a likely ‘Jet-Etihad’ equity deal was currently in the works.
According to the Indian FDI (foreign direct investment) rule, foreign investors including foreign airlines can hold a maximum equity of 49 percent in an Indian carrier.
Quoting ‘multiple people in the know’, Economic Times report said Naresh Goyal and his team met a top management team from Etihad, headed by group CEO Tony Douglas, last Sunday. Following this, Goyal had long meetings with his management at his Dubai residence.
“Goyal is willing to consider handing over the operational reins to the Middle Eastern carrier in exchange for a fresh cash infusion through equity and soft loans, with the founder of the airline continuing as its chairman,” the ET story said.
The Jet Airways spokesman told Arabian Business that the airline was in talks with ‘multiple investors’ currently for exploring a financial deal to infuse additional funds into the company to deal with the current ‘financial situation’ but nothing has been finalized yet.
“We have not reached a position on this (on the on-going negotiations with prospective investors) so that we can share it with the media,” the Jet spokesman said.
Earlier, the Indian conglomerate Tata group has been in talks with Jet for a possible buyout of the airline. The Tatas has also carried out an initial due diligence of Jet Airways and the issue was discussed in the last board meeting of Tata Sons.
The Tata’s interest in Jet, however, has lost steam following some of the Tata Sons directors advising group chairman N Chandrasekaran not to rush with any decision on this, as ‘there was need for being cautious’ about the issue.