Jet Airways Chairman Naresh Goyal today set at rest the speculation about Etihad exiting the carrier and a new investment partner coming on board.
There are no plans to sell stake in Jet Airways for now and all such talks are only speculation, Goyal told reporters on the sidelines of the 25th annual general meeting here. Goyal also said the Abu Dhabi-based carrier is not exiting from his airline, when asked whether he was taking on board another investment partner and that the Etihad was looking to deboard from his airline. When government in 2012 had allowed up to 49 per cent investment in the domestic carriers by foreign airlines, Goyal was the first one to grab this opportunity and managed to sell 24 per cent stake in the airline to Etihad Airways for Rs 2,069 crore in April 2013. It was ironic as he was a vocal critic of foreign investment in the aviation space.
Besides the equity investment, the two carriers have forged an extensive code share partnership and Etihad has assisted Jet in raising soft loans from Gulf-based banks. Of late, there have been plenty of rumours about both the partners looking to part ways, after government in June 2016 liberalised foreign direct investment in the aviation sector wherein 100 per cent FDI has been allowed provided the foreign investor is not an airline operator and 49 per cent if the investor is an overseas airlines. Some reports even suggested that the US carrier Delta Airlines was in talks with Goyal for a possible stake purchase in the carrier. This gained further currency after the two airlines extended their codeshare partnership early this year.
Goyal’s carrier has deep commercial collaboration with Delta. Earlier this year, Jet had also announced expansion of its codeshare with Air France-KLM.
These codeshare arrangements allow Jet passengers access to 34 American cities apart from 43 European destinations via Jet’s European hub in Amsterdam and 27 cities via Paris through Air France-KLM pact. Addressing shareholders, Goyal described fiscal 2017 as a year when Jet Airways operationally “ran as a tight ship.” He said fiscal prudence and laser-sharp focus on cost and a cautious expansion has ensured that the airline ended every quarter in FY17 in profit, with the March quarter net income being the eighth straight quarter of profitability. The airline closed the fiscal year 2017 with a consolidated profit of Rs 438 crore on a revenue of Rs 23,407 crore that grew only 2.2 per cent.
Goyal also credited his airline’s partnership with Etihad as one of the major reasons for the improved all-round performance which has primarily helped the airline gain on network growth, revenue increase, operational efficiencies and cost improvement. The airline will induct Harsh Mohan into its board in due course as a nominee of Etihad. “Harsh (Mohan) has gained wide aviation experience and financial acumen from his past associations in the aviation field and is currently the Chief Group Support Services Officer at Etihad Aviation Group,” Goyal said.