Top Etihad Airways and Jet Airways executives today met Civil Aviation Minister Ajit Singh here amid the possibility of the Abu Dhabi-based carrier picking up a 24% stake in the premier Indian airline.
The Etihad delegation was led by its CEO James Hogan at the meeting, which was also attended by Jet Airways promoter Naresh Goyal.
While neither Hogan, nor Goyal spoke about the meeting, Singh said both airlines have been "in consultation (over possible stake sale). So the Etihad delegation was here today. They were discussing details with Goyal."
Replying to questions, the Minister said, "Any foreign airline investing money has many concerns -- what's the policy, what's the cost structure (so that) you make money out of that. They have been discussing this deal for over a month. Since the government allowed FDI (by airlines), talks have been going on."
Asked by when the deal would be finalised, Singh merely said, "It is up to them."
He, however, said the agreement "should be within the regulatory framework."
The government changed its FDI policy in aviation in September last year to allow foreign airlines to acquire up to 49% stake in an Indian airline.
Earlier this month, Jet had informed the Bombay Stock Exchange that it was in talks with Etihad "regarding a potential investment."
"The discussions are in progress but no terms have been firmed up at present. Various structures are being explored by the legal and commercial teams," it had said.
Reports have said that Etihad may buy 24% equity in Jet Airways valued at about Rs 1,800 crore.
On issues relating to security and regulation, Singh said, "Once they sign the agreement, they will go through the regulatory requirements. Unless the deal is signed and approved, we can't say the deal is done. But I don't see any problems."
The Minister said FDI policy was liberalised to promote the entire aviation sector in the country by attracting foreign management and technical expertise and their reach.
Speculation was rife that the deal would be announced tomorrow after a board meeting of Jet Airways. If the deal is carried through, it would be the first investment by a foreign carrier in an Indian airline.
Jet sources said they would seek regulatory approvals only after the deal with Etihad was firmed up.
"An appropriate announcement would be made upon finalisation of the terms of the investment with Etihad as per legal and regulatory requirements," they said.
An Etihad spokesperson had earlier said that investments in foreign airlines "will be made where Etihad Airways believes the commercial prospects are strong, where there are like-minded business philosophies, and where such commitment will be welcomed. If or when we do make further investments of this sort, we will announce them in line with regulatory and commercial requirements."
Etihad has in the past two years picked up stake in several international carriers like Virgin Australia, airberlin, Air Seychelles and Aer Lingus.
When Etihad was set up in 2003, it had sought the help of the Naresh Goyal-owned carrier to set up its systems and Jet had given assistance with its specialists in various fields of aviation operations. Unconfirmed reports had then said Goyal had also invested money in the Gulf carrier.
A major reason for Goyal to dilute part of his shareholding in Jet from 80% has been the order of the Foreign Investment Promotion Board (FIPB) to bring it down to the regulatory levels.
