 "All you need to know about Jet-Etihad deal")
It is good news on multiple counts as Abu Dhabi-based Etihad Airways has agreed to inject Rs 2,054 crore ($379 million) into Jet Airways. The massive investment in Indian civil aviation will translate into value for passengers, too. Overseas carriers can offer expertise, connectivity and convenience, besides funds. Simultaneously, it indicates intense competition among Indian carriers, at a time when they show some signs of emerging from the red.
Aviation analysts say Jet would benefit from Etihad’s strategic expertise, cheap financing and possible fuel import benefits in addition to the capital injection. The two airlines claimed that their combined global network would cover over 140 destinations and provide direct foreign connectivity to Indian passengers from 23 metro and non-metro cities.
Etihad has been on an acquisition spree to compete with other Gulf airlines, mainly Dubai-based Emirates and Qatar Airways. It has negotiated stake purchases in four foreign airlines, including Air Berlin, Virgin Australia, Aer Lingus and Air Seychelles.
Last year, Etihad was ranked as one of the best airlines in the world by World Travel Awards. The awards are considered the Oscars of the travel industry.
Last year, Etihad was ranked as one of the best airlines in the world by World Travel Awards. The awards are considered the Oscars of the travel industry.
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Bank of America Merrill Lynch and Credit Suisse advised Jet on the deal, while HSBC was the adviser for Etihad.
Decoding The Deal
Under the agreement, Jet and Etihad will explore joint purchasing opportunities for fuel, spare parts, equipment and catering supplies as well as external services such as insurance and technology support. This will be a major cost-saver for Jet, which has been reeling under high fuel costs.
Under the agreement, Jet and Etihad will explore joint purchasing opportunities for fuel, spare parts, equipment and catering supplies as well as external services such as insurance and technology support. This will be a major cost-saver for Jet, which has been reeling under high fuel costs.
What it means for Jet
.Stake sale to bring much needed fresh capital, help reduce debt marginally
.Stake sale to bring much needed fresh capital, help reduce debt marginally
.Could now offer an alternative route for Indian passengers to fly to other West Asian, African cities and US, as well as Europe, apart from its current hub in Brussels
.Can leverage Etihad’s strong presence in Europe by bringing in Indian passengers through Abu Dhabi
What it means for Etihad
.Strategic investment enables Etihad to tap into India’s fast-growing 42 million strong travel market.
.Strategic investment enables Etihad to tap into India’s fast-growing 42 million strong travel market.
.Will help it to expand its limited footprint in India and make Abu Dhabi an alternative hub (apart from Dubai) for Indian’s travelling to US and Europe
.Could tap passengers to fly to Abu Dhabi and onwards to the US or Europe now from over 53 cities from where Jet has services