Jet Airways will sell a 24 per cent stake to Abu Dhabi-based Etihad for $ 379 million (approx Rs 2,046 crore). As part of the Jet-Etihad deal announced on Wednesday,Etihad will invest $ 220 million (approx Rs 1,190 crore) in Jet to create and strengthen a wide-ranging partnership.
This will include $ 150 million (approx Rs 810 crore) as majority equity investment in Jet Airwayss frequent flyer program Jet Privilege,and $ 70 million (Rs 378 crore) towards three pairs of slots at Heathrow through a sale and lease back agreement,Jet said in a statement.
After the deal,the promoters stake in Jet is expected to come down from around 80 per cent to 60 per cent.
Jet informed BSE that it was in talks with Etihad on January 3 the first such deal after the government allowed foreign carriers to buy stake in Indian airline companies in September 2012. Before the deal,officials from Etihad and the Indian civil aviation ministry met to sort out issues like bilateral rights.
The deal will give Etihad access to a huge market that has potential to grow at 7-8 per cent for the next decade. Jet will get capital,expertise and access to Etihads global network and base in Abu Dhabi.
Jet plans to connect 23 Indian cities to the world through Abu Dhabi,which will be its new international hub. It will also keep its other hub in Brussels.
The airlines will explore joint purchasing opportunities for fuel,spare parts,equipment and catering supplies,as well as external services such as insurance and technology support. Other areas of co-operation will include joint training of pilots,cabin crew and engineers,as well as maintenance of common aircraft types and the consolidation of guest loyalty programs, the Jet Airways release said.
It added that a joint project management office would be set up to ensure delivery of all synergy benefits to both parties.