Mumbai: The Tata Group is in talks with debt-laden Jet Airways to buy a majority stake in the troubled carrier and its loyalty programme, sources privy to the matter said. Tata Group aims to buy the 51 per cent stake owned by Jet Airways promoter, Naresh Goyal, and Etihad Airways’ 24 per cent stake, the sources said.
The company is also planning to merge Jet with Vistara which Tata Group owns in partnership with Singapore Airlines. Jet Airways needs an equity infusion before March 2019 to be able to survive and hence this is being pushed from the Jet Airways end.
Tata said in a statement that it would not comment on speculation. Jet Airways did not respond to a request for comment.
Shares in Jet Airways surged on the news report, closing up 10 percent on Monday. India’s aviation market is growing at 20 per cent annually, but a combination of rising oil prices, high fuel taxes, a weak rupee, low fares and intense competition have driven carriers into the red.
Jet Airways is making losses and is struggling to pay salaries and meet aircraft lease payments. The airline, which is seeking a cash injection, said in August it would cut costs in excess of Rs 2,000 crore in two years and planned to raise funds by selling a stake in its frequent flyer programme.Tata already owns two airline ventures in India – full-service carrier Vistara, in partnership with Singapore Airlines and AirAsia India, along with AirAsia Berhad.
