The Abu Dhabi-based Etihad Airways has confirmed that it is carrying out due diligence to possibly acquire a stake in Jet Airways.
“We are doing our due diligence…. in the next week we will present it to the Board and take it from there,” Etihad’s Chief Executive Officer James Hogan said at a press conference in Abu Dhabi on Monday.
Separately, in an analysts’ conference call in Mumbai, the Vice-President of Commercial Strategy and Investor Relations at Jet Airways, K. G. Vishwanath, said the airline was still in talks with Etihad for a stake sale. “It is too premature to talk about it,” he added. Neither Hogan nor Vishwanath gave details of the proposed stake sale.
In a recent report, the Centre for Asia Pacific Aviation had said that Etihad was expected to acquire 24 per cent stake in Jet Airways, which could result in an inflow of $330 million into the Indian airline. The report valued Jet Airways at $1.3-1.4 billion (about Rs 7,000 crore).
At the Abu Dhabi press conference, Hogan said that a delegation from Etihad had visited India recently and met with the Ministers for Commerce, Civil Aviation, and Finance. He added that the delegation wanted to understand what was affecting Indian civil aviation and how they (senior Ministers) thought things would change in the coming years.
200% rise in profit
During the presentation on the financial results for 2012, Hogan said that the airline had taken great strides in building the industry’s first ‘equity alliance’, with investments in airberlin, Air Seychelles, Virgin Australia and Aer Lingus, which were contributing significant value to the business. Etihad posted a 200 per cent rise in net profit in 2012.
“Equity and codeshare (an agreement where multiple airlines share a flight) partners delivered more than 1.2 million passengers onto the Etihad Airways network. airberlin, in which Etihad Airways holds a 29.21 per cent stake, made a very strong contribution, with more than 3 lakh passengers shared between their networks, delivering more than $130 million in total to the two airlines,” Hogan said.
Etihad’s Chief Financial Officer James Rigney said the airline was able to recover the $105 million equity investment made in airberlin in about seven months through a variety of measures including contract renegotiation.