At the moment, there is little clarity on whether Tata Sons will acquire a stake in Jet Airways though sources confirm intermediaries from the two companies have engaged in consultations.

Analysts say that at the moment everything is ‘up in the air’ with everyone sniffing around to for opportunities. They also feel that there is a “20-to-25 per cent” chance that Tata Sons will take a stake in Jet Airways. Under Natarajan Chandrasekaran as the Chairman of the Tata Sons’ board, the company has shown a keen interest in the aviation sector.

Tata Sons has a 51 per cent stake in Vistara Airlines with Singapore Airlines having the rest of the 49 per cent stake. Tata Sons also has a stake in Air Asia India, a low-cost airline.

As per media reports, Tata Sons has not commented one way or another about Jet Airways and the airline has termed reports of Tata Sons acquiring a stake in it as “speculative.”

However, one thing that is clear right now is that Jet Airways is in urgent need of funds. The country’s oldest private sector airline reported a net loss of Rs 1,323 crore in August this year.

The situation has reached such a pass that it has not only delayed paying its employees, it has also told the Directorate General of Civil Aviation (DGCA) that it intends to reduce flights from December.

Analysts believe that Jet Airways requires an equity infusion of about $1 billion or about Rs 7,000 crore to run on a sustainable basis.

One way of getting these funds could be from its partner – Etihad – enhancing its stake to 49 per cent from the existing 24 per cent. But whether the Gulf carrier which has its own financial woes to deal with, will pump in more funds in Jet is an issue.

In June this year, Etihad reported that it reduced its losses to $1.52 billion down from $1.95 billion in the previous year. Analysts argue that while Etihad might be in financial trouble, the promoters have deep pockets and could look at inducting more funds into Jet Airways. But, whoever pumps in more equity into the airline will like to see Naresh Goyal’s equity and influence in the airline he founded reduce substantially or at least vacate the driver’s seat and not be in a position to steer the fortunes of the company.

Whether Goyal who has been involved with the running of Jet for 25 years since its inception will be ready to give up now is also not clear.

All eyes are now on the sale of Jet Privilege, the airline’s frequent flyer programme which it has put up for sale. Industry watchers say that if the airline is able to garner a few hundreds of thousands of crores of rupees from the sale then it will get enough funds to function smoothly for the next two to three months. What happens after that, remains to be seen.

Correction

This news report has been modified to correct Etihad's stake holding in Jet Airways. Etihad has a 24 per cent stake in Jet Airways, and not 26 per cent, as an earlier version said.

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