Co-pilots

24 April 2013 By Una Galani Follow @ugalani

The Abu Dhabi carrier is throwing indebted Jet Airways a $600 mln lifeline for a 24 pct stake and control of its loyalty programme. But the generous 32 pct premium suggests Etihad will expect more than a minority role at the Indian airline.

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Abu Dhabi-based carrier Etihad Airways has agreed to buy a 24 percent stake in India’s Jet Airways as part of a deal worth $600 million. Etihad will pay $379 million to buy 27.3 million shares at 754.74 rupees each or a 32 percent premium to the Indian carrier’s last closing share price.
The airline will buy a majority stake in Jet’s frequent flyer programme for $150 million. The deal also includes the sale and lease back of three pairs of Jet’s London Heathrow slots for $70 million that was first announced in February.
Jet founder Naresh Goyal will own 51 percent of the airline after the deal and remain non-executive chairman. India relaxed foreign ownership rules in September allowing foreign carriers to buy up to 49 percent of local ones.
The deal, which is subject to regulatory and shareholder approval, will establish Abu Dhabi as a Gulf gateway for Jet’s flights to the United States, Europe, Africa and the Middle East.
In the last two years, Etihad has purchased minority stakes in Air Berlin, Virgin Australia, Aer Lingus, and Air Seychelles.

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