Jet Air rises 6% as stake sale deal with Etihad gets closer

Moneycontrol Bureau

Shares of Jet Airways rose around 6% to Rs 612 on media reports that Abu Dhabi-based Etihad will pick up 24 percent stakes in the carrier for around Rs 1,800 crore within ten days.

According to an Economic Times report citing sources, James Hogan, Etihad's CEO and the person who is widely believed to be driving the negotiations, is on leave till January 4 and things would move once he is back in action.

Etihad has been in talks with Kingfisher Airlines and Jet Air for the past three months and current media reports suggest that after much due-diligence, the latter has emerged as a much stronger contender for the Gulf airline which is keen to invest in India.

A section of media reports also suggest that after the deal, Jet Air could shift its international base from Brussels to Abu Dhabi. The shift of international base could also give the Indian carrier access to aviation turbine fuel at much cheaper rates, according to the broad contours of the deal.

Also, both airlines will operate flights on code share and Jet Air is also likely to put on hold its plan to join the Star Alliance.

If the deal goes through, Jet Air will be the first airline to get foreign direct investment after the government relaxed norms to allow foreign airlines buy up to 49 per cent stake in Indian carriers.