New Delhi, Jan 31 (IANS) A joint delegation of Jet Airways and the Abu Dhabi-based Etihad Airways Thursday met Civil Aviation Minister Ajit Singh and Commerce Minister Anand Sharma, indicating that a stake sale deal between the airlines could be around the corner.
The delegation was led by the top executives of both airlines, including Jet Airways' Naresh Goel and Etihad's chief executive James Hogan.
According to government officials, the delegation, which met both ministers separately, briefed them about their plans and investment prospects.
After the meeting, Ajit Singh said there was no problem in a stake sale deal if the two airlines get regulatory clearance.
"Unless the deal is signed and approved, we can't say the deal is done. But I don't see any problems. Once they sign the agreement, they will go through the regulatory requirements," Ajit Singh told reporters at his residence after meeting a delegation comprising members of both airlines.
According to the minister, talks between both airlines had been going on for a month, and both parties seemed to have come to an understanding for a possible stake sale by Jet Airways to the Abu Dhabi-based passenger carrier.
"This is a very good move... that Jet and Etihad are talking about a deal. Our concern is that the aviation sector in India should grow and that the competition should also grow," Ajit Singh said without divulging any details about the discussions that were held.
Asked about any concern that Etihad had raised, Ajit Singh said this was an initial meeting to know the position of both the airlines on a possible deal and that both know the ground realities.
"Any foreign airline investing money has many concerns. On the policy, what's the cost structure, because they are going to put in money to make money out of it (investment). They have been discussing this deal for over a month."
Anand Sharma said after the meeting: "We (government) have put in place an enabling policy and any investment under the policy is welcome."
The stock of Jet Airways shares closed higher by 25.90 points or 4.34 percent in Thursday's trade at the Bombay Stock Exchange (BSE) on the back of reports that the Abu Dhabi-based airlines may invest in the company.
The company's scrip at the BSE closed at Rs.622.10 per share from its previous close of Rs.596.20.
Talk of a possible stake sale has been doing the rounds for three months, ever since the government allowed foreign airlines to pick up 49 percent shares in domestic carriers.
Foreign carriers have so far not been allowed to directly invest in Indian carriers for security reasons although 49 percent FDI by non-airline players was allowed.
The Indian civil aviation sector has been going through a tough operating environment with high fuel and interest costs hurting it. The government expects that the decision will help bring in more funds to the airlines that have been cold-shouldered by banks.