Etihad pays Jet $70 million for 3 slots at London’s Heathrow
28 Feb 2013 8:38 AM IST
In what is seen as a step towards closing its proposed investment plans in Jet Airways, Etihad Airways on Wednesday said it has paid $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 $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.
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.
NEWS PUSHES UP JET SCRIP BY 19%
Shares of Jet Airways on Wednesday settled with gains of over 19 per cent, adding Rs 746 crore to its market capitalisation as the Abu-Dhabi based Etihad paid $70 million to the Indian carrier Jet for three Heathrow slots.
Reacting to the news, the shares which were on a down slide for the last five trading sessions surged to touch an intra-day high of Rs 537.75 on the BSE, a rise of 20 per cent from their previous closing price. At the close of trading, the stock was trading at Rs 534.85, higher by 19.27 per cent from its previous closing price.
'Etihad Airways can confirm that it has concluded a transaction with Jet to purchase Jet's three pairs of Heathrow slots for $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.
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.
NEWS PUSHES UP JET SCRIP BY 19%
Shares of Jet Airways on Wednesday settled with gains of over 19 per cent, adding Rs 746 crore to its market capitalisation as the Abu-Dhabi based Etihad paid $70 million to the Indian carrier Jet for three Heathrow slots.
Reacting to the news, the shares which were on a down slide for the last five trading sessions surged to touch an intra-day high of Rs 537.75 on the BSE, a rise of 20 per cent from their previous closing price. At the close of trading, the stock was trading at Rs 534.85, higher by 19.27 per cent from its previous closing price.
Next Story
