Jet Airways might as well become the the first of the Indian carriers to get a foreign equity investment, with the Jet – Etihad deal moving in the forward direction today after being stalled for a while.
For a quick recap, Jet Airways agreed to sell 24% stake in the airline, majority stake in loyalty program JetPrivilege and its London slots to Etihad for a price of roughly $600 million. This deal, obviously, was subject to regulatory scrutiny and approvals. However, it turns out that there were way too many clauses where Etihad was going to take over control, including the move to migrate revenue management to Abu Dhabi. Also, Etihad was getting veto powers, so they had a say on everything for just being a minority shareholder.
Various Indian regulators, such as SEBI (Indian capital markets) raised their concerns, and these were taken into consideration by the authority which had to give its clearance on the deal. As a result, the deal has been hanging for over a month.
Last week, Etihad and Jet Airways put forth a watered down version of the deal, which included lesser number of board seats, and this has been approved by the Foreign Investment Promotion Board today. All that remains now is approval by the Government of India (formally), and the deal is a go. I don’t expect much hesitation from the Government to sign off on the deal, which means the airlines would soon move forward on their integration as well.
Jet Airways surely is my preferred airline in India, and after my recent trip on Etihad, I am a fan of theirs as well. So, I look forward to seeing how the integration works out and what new comes out for frequent fliers such as myself with this alliance.
- Jet Airways to sell 24% stake to Etihad Airways as well as JetPrivilege
- Jet-Etihad come closer, EY buys 9W’s LHR slots
- Jet Airways deal with Etihad Airways
- Jet Airways on verge of strategic partnership with Etihad
- Speculation: Is Jet Airways going to get a shareholder in Etihad Airways?