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Two days after the Jet-Etihad deal got FIPB approval, the buzz around SpiceJet looking for a partner has got louder.
The Kalanithi Maran-promoted low-cost carrier is reported to be in advanced stages of negotiations for a stake sale to a foreign airline. According to market sources, Dubai-based Emirates is the top suitor.
Burdened with a debt of Rs 1,429 crore, the SpiceJet management has apparently had talks with Gulf-based carriers Kuwait Airways and Qatar Airways.
However, industry sources indicate that the latest round of talks is with Emirates. “A deal with Emirates is a high possibility as the West Asian carrier is likely to lose out on market share in India after the Jet-Etihad deal. Emirates may be actively looking to partner with an Indian carrier,” said Sharan Lillaney, aviation analyst with Angel Broking.
In a recent interview to Business Line on the possibility of a deal with an Indian carrier, Emirates President Tim Clark had said, “I have never said no. Of course, we have looked at this.” ‘The Indian aviation market is a big cake and Etihad had got a piece, but at least three quarters of the cake is still there, uneaten,’ had he said.
Emirates did not respond to an e-mailed query seeking further information on the issue.
The largest foreign airline operating in India, with 185 weekly flights to 10 destinations, Emirates has over 13 per cent share of the outbound traffic from India.
The airline has been lobbying hard with New Delhi for an increase in the number of seats it operates from 54,200 a week to and from India to about a lakh a week. In West Asia, Dubai is the largest hub for Indians travelling to the US and Europe.
The Civil Aviation Ministry recently granted Abu Dhabi a four-fold increase in seat capacity over three years, raising the bilateral flying rights between India and Abu Dhabi to 53,000 seats a week from 13,300 now.
Aviation experts say the gap in seat capacity between Abu Dhabi and Dubai will narrow substantially as a result of this and Abu Dhabi may well become a hub in West Asia soon, which could hurt the Emirates market share. About 40 per cent of West-bound Indian traffic is routed through the Gulf.
Neither confirming nor denying these reports, SpiceJet refused to comment on this issue. When contacted, S.L. Narayanan, Group CFO, Sun Group, said: “As a matter of policy, we don’t comment on speculative stories.”
Earlier, the airline issued a statement to the stock exchange reiterating that a few investors had shown interest in the company after the Government allowed FDI by foreign airlines in civil aviation.
The company added that it would be premature to comment on the possibilities of any fresh equity issuance to such interested parties or even confirm/deny the names of specific entities.
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