Etihad Airways pays $70 mn to Jet Airways for three Heathrow slots

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Move seen as a positive for sealing the Jet Airways-Etihad stake sale deal. (Reuters) Move seen as a positive for sealing the Jet Airways-Etihad stake sale deal. (Reuters)
SummaryMove seen as a positive for sealing the Jet Airways-Etihad stake sale deal.

In what is seen as a step towards closing its proposed investment plans in Jet Airways, Etihad Airways today said it has paid USD 70 million to buy three slots of the Naresh Goyal-promoted airline at Heathrow airport in London.

"Etihad Airways can confirm that it has concluded a transaction with Jet to purchase Jet's three pairs of Heathrow slots for USD 70 million. The purchase is part of a sale and lease back agreement signed yesterday," Etihad said in a statement.

The statement further said Jet will continue to operate flights to London utilising these slots.

The deal further strengthens the existing commercial relationship between the two airlines, which came into effect in July 2008, making provision for codesharing, Etihad said.

On the ongoing stake sale talks between the two, Etihad said they continue to progress with discussions about further investment in Jet.

However, on the 24 per cent proposed stake sale to Etihad, Jet sources said, Jet has reportedly agreed to cede more management control, including more board positions to Etihad. However, this could not be officially verified with either Jet or Etihad officials.

This is to enable sealing the deal that has of late hit some airpockets with the UAE-based airline saying that it wanted to relook at its investment plan in Jet.

The market cheered the development, ramping up Jet share prices by 20 per cent to Rs 520 on the BSE today, whose main gauge was trading up 170 points at 1430 hrs.

If materialised, this will be second FDI in the domestic aviation sector after Malaysian carrier AirAsia announced a 49:51 per cent partnership with Tatas and Telestra Tradepalce of Arun Bhatia in the middle of this month to launch a low-cost airline.

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