Jet Airways deal with Etihad Airways

News of a strategic partnership between the airlines has been discussed since September 2012, and of late the news is hitting the peak, also helping the stock price of the listed entity Jet Airways in the meanwhile.

While there was a lot of discussion earlier in the past week that grounded carrier Kingfisher was taking away the funding cake from Etihad, with the lollipop of handing out operational control to Etihad (along with a 46-49% equity stake), Kingfisher categorically denied the news. However, the board of Kingfisher airlines met last week as well, to limit investments by institutional investors to create space for an airline to take stake in it.

Remember, time is running out for KFA who may have no license to fly as of 31 December 2012. Vijay Mallya, chairman of the airline, was initially expected to make an announcement of a deal on 18 December 2012 in his birthday bash at Goa, but looks like that is not the case now.

In the meanwhile, the Etihad boardroom seems to be in favour of a deal with Jet Airways, where the stake will be smaller (at 24%), but at a premium. The airline is already in the air, has a reasonable amount of frequency to Abu Dhabi as well, and recently announced a new codeshare agreement where all flights to Paris on EY will be sold with the 9W code as well.

Unnamed sources of the blog confirm that a deal may be announced as soon as Monday (17 December 2012) since the airlines are now on the same page with valuations, but it is not done till its done, so we’ll see how Monday passes by for both the carriers.

In the meanwhile, lets hear from you…

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About Ajay Awtaney

Ajay is a financial services pro, working to bring order to the chaos of the financial industry on an everyday basis! Beyond that, he dons the hat of India's favourite frequent traveller, trying to help people elevate their travel experience via tips and tricks they never knew before, or introduce them to the world of miles and points. Armed with an MBA from MDI Gurgaon and graduate degree in computer science from the University of Delhi, Ajay brings a systematic and objective approach on the table for his audience in dissecting travel and loyalty programs in India and around the world, and how to benefit from them. Ajay has been quoted in various reputed traditional and online media including The Hindustan Times, Inside Flyer, Bloomberg, DNA India, Conde Nast Traveller, The Telegraph, Mumbai Mirror, Mint, MoneyLife and The USA Today.

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