Etihad Airways PJSC has agreed to lead a rescue of cash-strapped Jet Airways India Ltd in a move that will see the Abu Dhabi-based carrier double its stake to 49 percent, according to television reports.
Etihad is in talks to lift its holding from the current 24 percent, India’s BTVI channel reported, citing unidentified people familiar with matter. CNBC-TV18 said that Jet founder Naresh Goyal’s stake could drop to 20 percent from 51 percent, and that he’ll stand down as chairman.
Shares of Jet Airways closed 16 percent higher in Mumbai, where it is based. The company ranks as India’s biggest full-
service airline, but has failed
to post a profit in nine of the past 11 fiscal years. Cash is running short as fare wars depress revenue and turbulent oil prices increase costs.
Jet didn’t immediately respond to requests for comment, though it said in a filing earlier that it had made no decision requiring a stock-market disclosure. People with knowledge of the matter said last week that the airline is seeking funds from investors including Etihad.
The deal, if it goes through, will give the Middle East carrier more say over Jet Airways’ operations and its day-to-day management, with Goyal’s voting rights capped at 10 percent, BTVI said.
Etihad CEO Tony Douglas has said he’ll focus more on local needs rather than carrying passengers between continents.