Etihad Airways will likely sell its entire 24% stake in Jet AirwaysBSE -0.54 % by December this year, consultancy firm CAPA-Centre for Aviation said. Etihad denied any such plan, while Jet called it “speculation”.
The sale, possibly in the third quarter of the next fiscal year, “could lead to a rationalisation of capacity between India and the Gulf, particularly Abu Dhabi,” the Sydney-based consultant said in a tweet.
“The claims made in the CAPA report are false. Jet Airways is a valuable partner of Etihad Airways, and we have no plans to divest,” Abu Dhabi-based Etihad said in an emailed response to ET’s queries. A spokesman at the Indian carrier said it “does not comment on speculation”.
Rumours of Etihad’s exit have been rife in the aviation industry since last year, despite Jet chairman Naresh Goyal and executives denying it. Goyal had also denied Jet was looking for another partner, despite floating industry information of talks with Air France-KLM and Delta Air Lines with whom Jet has deep rooted commercial ties. Sources said Goyal had been wooing all these airlines for a stake sale. ET reported on July 3, 2017 about talks with Delta Air Lines.
In November, during an interview to ET, Air France-KLM chairman Jean-Marc Janaillac didn’t rule out a strategic investment in Jet, although he said there were no plans at the time for such a deal. It will be a complex process if Etihad and Jet want to disengage, analysts said. The Abu Dhabi-based carrier owns 24% in Jet and half of its miles rewarding unit Jet Privilege.
It had bought flight slots in London from Jet, which then leased those from Etihad. It has also wetleased — with crew — several widebodied planes from Jet. On top of that, at a time when most of its European investments, primarily Alitalia and Air Berlin, are bleeding, Jet is the only large-sized partner carrier for Etihad making consistent profits and giving it traffic flows to take on its Gulf peers Emirates and Qatar Airways as well as western rivals in this region. Etihad, in fact, has a lot to gain from India’s rapidly inflating air traffic.
“Jet has little to gain from the alliance with Etihad now, but the latter has a lot to get from it,” said the senior executive of a rival carrier, who didn’t want to be named. “Their ties are complex and deep. Only time will tell how and if the airlines manage to go their own ways.”
