Jet Airways owes banks nearly Rs 8,000 crore.
NRI businessman MA Yusuff Ali, founder of the Lulu Group, may play a key role in the ongoing talks between Etihad Airways and Jet Airways, sources told Moneycontrol.
This would be the second such instance of the NRI entrepreneur featuring in a deal between the two airlines.
Sources said Ali could come in as Etihad's Indian partner, the need for which will arise if the Abu Dhabi-based airline decides to invest in Jet Airways and triggers an open offer.
According to the Indian government's FDI rules, a foreign investor can own a maximum of 49 percent in an Indian airline.
In 2013 too, Ali played a critical role in talks between the two airlines. Etihad later bought a 24 percent stake in Jet Airways for Rs 2,069 crore.
The ongoing talks between Etihad and Jet are now at an advanced stage, with Jet facing an urgent need for funds. The airline is losing almost Rs 15 crore a day, and has deferred salary payments to its pilots. But its management has promised to clear pilots' dues by March 2019.
Jet Airways has also rationalised routes, closing down flights from second tier cities in India, and introducing new ones from its hubs in Delhi and Mumbai. Some of its aircraft have also been grounded.
While a representative of Lulu Group didn't respond to queries, a Jet Airways spokesperson said: "In line with its policy, Jet Airways does not comment on speculation."
Interest in aviation
Though he lords over a retail giant - the $7.4 billion Lulu Group that operates hypermarkets and malls in India and overseas - Ali has a liking for aviation.
He holds stake in CIAL, the operator of Cochin's international airport, and also in KIAL, the new airport in Kannur that will open later this month.
"Lulu Yusuff Ali is a possibility.He has always wanted to be in the airline business having invested in Kochi and Kannur airports. He is also connected to the Al Nahyan family," said a senior executive from the industry.
It is Ali's proximity with one of the six ruling families of UAE that had prompted Jet Airways Chairman Naresh Goyal to seek out the Gulf businessman. The present UAE President Khalifa bin Zayed Al Nahyan belongs to the ruling family.
Etihad is owned by the Abu Dhabi government.
Earlier this year, Ali's ties with the family again came into the limelight when he informed Kerala Chief Minister Pinarayi Vijayan about UAE's offer to give an aid of Rs 700 crore to the flood-ravaged state.
During the 2013 deal negotiations between Jet and Etihad, Ali had done his bit to mediate between the two sides and bring the deal to a close. Now five years later, with Goyal desperate for a deal and Etihad also driving a hard bargain, Ali could be the deal maker once more.