Etihad Airways to Purchase 24% Stake in Jet Airways
Jet Airways, India’s second largest airline, announced its board of directors had improved the sale of a 24% stake in the airline to Etihad Airways. Jet Airways said it would issue approximately 27 million new shares of the company that it will then sell to Etihad for a minimum of 754.74 rupees ($13.91 at today’s exchange rate) each, or a minimum of 20 billion rupees ($380 million).
The two airlines will create a strategic alliance that will allow them to coordinate and expand flights, expand codesharing, and offer reciprocal benefits to passengers who are members of their frequent flyer programs. The combined route network of Jet Airways and Etihad serves 140 destinations.
In December 2012, Etihad acquired Air Berlin’s topbonus frequent flyer program and the two airlines formed a new entity to manage the combined program and expand it to other airlines.
The transaction, which requires shareholder and regulatory approval and was first rumored in January, will allow the two airlines to expand existing services and introduce new routes between India and Abu Dhabi.
Jet Airways currently operates several flights to Abu Dhabi from six Indian cities including flights that are codeshares with Etihad. It is seeking government authority to add flights from 23 additional cities to Abu Dhabi.
In February, Etihad Airways purchased Jet Airways’ three Heathrow. Jet Airways continues to operate flights to London using these slots.
Last September, India’s government changed the rules for foreign ownership of airlines. A foreign carrier can buy up to 49% of an Indian airline.
(Photo: Accura Media Group)