Almost two months after the government relaxed rules to allow foreign carriers to buy upto 49% stake in the domestic airlines, a senior bureaucrat on Monday said Jet Airways and SpiceJet Ltd are both in talks with global carriers like Abu Dhabi’s Etihad Airways and Malaysia’s AirAsia for a minority stake.
“The talks are on. This is more or less final. It may take around a month-and-a-half,” said the government official referring to the Jet-Etihad negotiations.
This would be bigger of the two deals with an estimated transaction cost of Rs. 2,450 crore. Both airlines already have a code-sharing agreement and a deal could help them win market share from the other players while posing a stiff challenge to Emirates' airline that dominates routes between India and the Middle East.
SpiceJet said some foreign airlines have evinced interest in it amid speculation that AirAsia and Qatar Airways have expressed keenness to buy a stake. At current share prices, a 49% stake in Spicejet would amount to Rs. 1,082 crore.
“It is true that a few foreign airlines/investors have evinced interest,” a SpiceJet spokesperson said. “It will be, however, very premature to comment.”
Malaysian budget carrier AirAsia Berhad, however, dismissed speculation. “AirAsia rejects the speculation surrounding our possible expansion in India. These reports are completely incorrect,” AirAsia Group CEO Tony Fernandes said.
Jet shares rose about 14.3% and SpiceJet jumped as much as 19.2% on Monday.
(With inputs from Reuters)