Jet Airways to sell 24% stake to Etihad Airways as well as JetPrivilege

This afternoon in India, Jet Airways’ Board of Directors put their agreement to receive a fresh induction of $380 million by Etihad Airways, who in turn will get 24% of the expanded equity capital of Jet Airways, thus making Jet Airways a part of the Equity alliance of Etihad Airways, where Etihad is sewing up partnerships with various airlines by picking up equity stakes in them. I first wrote about this possibility back in September and while the deal was close to being struck then, it took quite some back and forth in the few months ahead to come to a consensus.

Etihad confirmed later in the day that they were taking the 24% stake for $379 million dollars, and will also infuse $150 million into Jet Airways frequent flyer program JetPrivilege, and reciprocal earn and burn opportunities between both programs. Jet Airways already had sold their three pairs of London Heathrow slots to Etihad earlier, to receive $70 million in cash. Jet Airways was working as of last year to make a separate business entity for its frequent flyer program.

A part of the terms of the deal is to have Jet Airways make a hub in Abu Dhabi, and Jet Airways gets a preferential loan from Etihad’s lenders for $400 million, all of which helps Jet Airways retire its debt of $2 billion. There is also news that Jet could be leasing away some of its Airbus 330-200 planes to Etihad.

Also, while there is no news of Jet Airways wrapping up its current flights to the USA, the proposed increasing number of flights to Abu Dhabi will also be helped by transit to the USA with a pre-clearance, which may come into play soon. Jet has plans to start, along with Etihad, 23 new city pairs connecting into Abu Dhabi.

This deal clearly comes as a shot in the arm for the airline, where things were pretty bad past few months due to the debt situation. This also means a new business model will come into place with respect to the international flights, something I am keenly tracking.

Watch this space for more, and I am happy that my favourite Indian airline finally got a quality investor! I am finally hoping there will b be a Etihad/Jet Airways lounge at Mumbai & Delhi airports, something that has been missing for aeons since Jet Airways became an international carrier.

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About Ajay

Ajay Awtaney is the Founder and Editor of Live From A Lounge (LFAL), a pioneering digital platform renowned for publishing news and views about aviation, hotels, passenger experience, loyalty programs, travel trends and frequent travel tips for the Global Indian. He is considered the Indian authority on business travel, luxury travel, frequent flyer miles, loyalty credit cards and travel for Indians around the globe. Ajay is a frequent contributor and commentator on the media as well, including ET Now, BBC, CNBC TV18, NDTV, Conde Nast Traveller and many other outlets.

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  1. What a lucky day for both EY and 9W!

    Good things:
    1. Increases frequencies in major metros to compete with EK. The current 1 daily AUH-BOM doesn’t cut it.
    2. Connect those regional points west and gain advantage over EK. Coimbatore, Lucknow, Vadodara, Jaipur, Pune, Mangalore, Bhubhaneswar, the list is endless.
    3. Much more competition for Indian consumers

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