In the first foreign direct investment (FDI) deal after India opened up the aviation sector, Naresh Goyal-led Jet Airways will sell a 24% stake to UAE-based Etihad Airways in a Rs. 2,000-crore ($379 million) deal that forms part of a long-term commitment of $600 million.
The deal in which former travel agent Goyal put behind rivals like Vijay Mallya-led Kingfisher is the first since the government in September 2012 permitted foreign airlines to pick up 49% stake in domestic carriers and comes after intense negotiations.
Abu Dhabi-based Etihad will access India's promising market set to grow at 10% a year to 42 million in five years, in the backdrop of an emerging economy of 200 million middle class Indians, while Jet will get access to a global market.
"This is a game changing deal for Etihad as it now gets a home market of 1.3 billion," said Kapil Kaul, CEO of aviation consultancy firm CAPA.
"Naresh Goyal has shown again why Jet is India's longest surviving private carrier as he has managed to constantly adapt to the changing environment," said Rajji Rai, chairman of Swift Travel International Ltd in an apparent reference to how he changed tack from a protected market to a global one.