New Delhi, Jan. 25: Jet Airways is close to a stake pact with Etihad Airways with senior executives from both sides busy finalising the contours of a deal.
While both the airlines refused to confirm or deny the development, sources said Etihad's chief executive, chief strategy officer and chief financial officer met senior Jet officials today.
The talks are meant to finalise the share sale price and other details of the deal.
According to sources, the Abu Dhabi-based carrier could pay up to $330 million for a 24 per cent stake in India's second-biggest carrier.
Jet Airways had informed the BSE that a meeting of the company's board of directors would be held on February 1, which among other things, would consider and approve the unaudited results for the third quarter ended December 31, 2012.
Stake-sale talks between Etihad and Kingfisher Airlines had fallen flat after the turnaround plan of the Vijay Mallya-led carrier failed to impress both Etihad and India's Directorate General of Civil Aviation.
Jet officials had said the agreement was likely to take some time because of the complexity of the legal requirements for the deal.
"The deal might get inked between the last week of January and the first week of the next month. Rest we will share details as and when the events happen," a senior Jet Airways had said.
In the last two years, Etihad has picked up stakes in several international carriers, including Virgin Australia, Air Berlin, Air Seychelles and Aer Lingus.
The government had allowed foreign carriers to buy stakes of up to 49 per cent in local carriers in September 2012, a move seen as a succour to the cash-strapped domestic airlines.
Etihad and Jet have a code-sharing agreement and a tie-up could make Jet a more formidable competitor to state-owned Air India. It will also strengthen Etihad's position against Dubai-based Emirates Airline, which carries a big chunk of the traffic between India and West Asia.
The Jet Airways scrip rose over 4 per cent on the stock exchanges today on hopes that Etihad Airways will pick up a stake.
On the NSE, the stock settled at Rs 611.65, a gain of 4.30 per cent over the previous close of Rs 586.45. On the BSE, the scrip closed 611.85, a rise of 4.26 per cent.
It is learnt that the deal may happen at a price of Rs 750-760 per share, which is a premium of nearly 23 per cent to Jet's current market price.
According to Siddharth Bothra, analyst at Motilal Oswal Securities, the medium-term outlook for the domestic aviation industry is positive because of the sharp moderation in capacity and rational pricing by key players.
He said since 2010-11, the operational domestic fleet size had shrunk from 252 to 237, which had given significant pricing power to the carriers.