Jet Airways may be looking at getting an edge over its peers by bringing in a foreign carrier as a strategic investor through stake sale in the airline company but analysts feel that any such deal will only be beneficial for the foreign partner.
“More than Jet Airways, any deal of this kind will be operationally more beneficial for the foreign partner that buys into the Indian carrier,” said Mahanatesh Sabard, senior analyst with Fortune Equity India.
Another analyst explained that the civil aviation ministry has allowed Indian carriers a large number of flying rights and it is time they utilise that.
“Any kind of alliance now will provide an access to international carriers into India, who are not being allowed by the civil aviation ministry now. With the alliance, Jet must be trying to get into an alliance with a West Asian carrier that will provide them a link between Europe and Asia but this might go into the foreign partner’s favour,” said an aviation analyst.
He further explained that any Indian carrier has two other ways to expand its international network — one is by joining an airline alliance and the other is by getting into code share with various airlines — and Jet could easily work on these two instead of going for a foreign partner.
This deal may surely help Jet Airways financially and give the airline much needed funds, as the airline is not in a very good position on this front.
“Jet is losing market share in the domestic sector and the airline is also not looking very promising in the international sector. All these are concerns that does not make the revenues for the airline very promising going ahead. The attempts by airline to restructure its cost is also not yielding results, as can be seen from the loss posted in the September quarter” said Sabarad.
Jet Airways’ incurred a loss of around Rs 100 crore in the second quarter of the current fiscal.
Analysts also say that the net worth of Jet Airways post the losses has been eroded and the airline has a debt on