Etihad Airways is favoring India’s Jet Airways over struggling carrier Kingfisher Airlines to acquire a minority stake, Reuters has reported, citing a senior government source.
A deal could happen in the next 10 days, valued at reportedly $330 million for a 24% stake in the Indian carrier. “From what I understand, they were talking about 1,500 crore to 1,800 crore (15-18 billion rupees) for 24%,” the official reportedly said.
Etihad and Jet already have a code-sharing agreement, and a tie-up could make Jet a strong competitor to state-owned Air India. The acquisition would also strengthen Etihad’s stand against Emirates Airline, which carriers a major portion of the traffic between the Middle East and South Asia.
The other contender for Etihad’s investment was cash- and debt-strapped Kingfisher. The airline lost its operating license on January 1 after failing to provide a funding plan to get it off the ground, Bloomberg News has reported. The permit was reportedly issued in August 2003.
The airline controlled by liquor baron Vijay Mallya has been looking for an investor for over two years and had to ground all flights in October after failing to pay employee salaries. Its debt currently amounts to $1.6 billion.
Meanwhile, Prakash Mirpuri, a spokesman for the carrier, said that it is in the process of procuring some documents that the Directorate General of Civil Aviation has asked for. In an email to Bloomberg News, Mirpuri said that Kingfisher “is confident of securing approval from the DGCA on the restart plan.”