Beating rival Kingfisher in the race to get an Etihad stake, Jet has stitched up a sweetheart deal, say experts.
The Naresh Goyal-promoted airline can use the investment to cut its R12,000-crore debt burden, expand to dozens of interior towns and possibly steal the no-frills thunder from budget carrier IndiGo.
It can tank up flights in UAE with cheaper fuel as taxes are higher in India., while Etihad will get a foothold in a growing emergy market of 1.3 billion people as the two link 140 destinations. Etihad will give Jet access to a global market beyond the Gulf region.
A recent report by the Centre for Asia-Pacific Aviation said in a report that "at a later stage Etihad's stake could be increased to 49%."
For the deal to go through, Jet would have to approach the Foreign Investment Promotion Board to change its shareholding pattern.