x Abu Dhabi, UAESunday 23 July 2017

Etihad Airways deal to buy Jet Airways stake approved by India cabinet

Aviation minister Ajit Singh confirms the deal has moved a step closer but it still needs the Indian anti-trust regulator’s approval

India’s cabinet has approved a deal by Abu Dhabi’s Etihad Airways to buy a stake in Jet Airways, the aviation minister Ajit Singh told reporters, taking the companies one step closer to completing the long-delayed deal.

The deal still needs the Indian anti-trust regulator’s approval. Reports on Tuesday said the Securities and Exchange Board of India had given its nod for the deal after both airlines made revisions to comply with its conditions.

Etihad in April announced the agreement to acquire a 24 per cent stake in Jet Airways for US$379m. It is investing a further $150m in Jet’s frequent flyer programme and $70m to buy Jet’s six landing slots at Heathrow Airport through a sale-and-leaseback agreement.

It is the first such deal since the Indian government relaxed rules in September last year to allow foreign airlines to own up to 49 per cent of Indian carriers.

The deal had been delayed due to scrutiny by Indian regulators and also due to opposition from some politicians, before the foreign investment regulator cleared it with conditions in late July.

Jet Airways did not reply to an email from Reuters seeking comment on what more approvals it needs for the deal.