Jet Airways announces Rs 2,058 cr alliance with Etihad Airways

Jet Airways announced a strategic alliance with Etihad Airways, saying it would sell 24 per cent stake to the Abu Dhabi-based carrier for about Rs 2,058 crore, marking the first investment by a foreign carrier in an Indian airline since the change in FDI policy.

Bringing curtains down on almost six months of tough negotiations, top officials including Jet promoter Naresh Goyal and Etihad President and CEO James Hogan, announced the strategic equity alliance in Abu Dhabi under which the Indian private carrier would sell 27.26 million shares in a preferential offer to Etihad at Rs 754.74 apiece.

“The value of this equity investment is USD 379 million (about Rs 2,058 crore) and will result in Etihad Airways holding 24 per cent of the enlarged share capital of Jet Airways,” a joint statement by the two airlines said.

The deal is subject to shareholders’ nod, including regulatory approvals.The two airlines claimed that their alliance would lead to Indian passengers from 23 cities to gain direct access to an expanded global network. Jet would also enhance its services from its primary hubs of Delhi and Mumbai and introduce new flights from Hyderabad and Bangalore.

The new India-Abu Dhabi routes and Jet Airways would ‘establish a Gulf gateway for flights to the US, Europe, Africa and the Middle East’, the statement said, adding that their combined global network would cover over 140 destinations.