Etihad Airways to take 24% stake in India's Jet Airways

An Indian security official looks on as an aircraft of Jet Airways taxies after landing at Indira Gandhi International Airport in New Delhi The Indian aviation sector is opening up to foreign investment

Related Stories

Etihad Airways is to take a 24% stake in India's budget carrier, Jet Airways.

The $379m (£248m) deal is the first foreign investment in an Indian airline since ownership restrictions in the sector were eased last year.

Jet, which has struggled of late, will get a boost from Eithad, which is based in the United Arab Emirates.

Etihad Airways is paying a premium of 32% on Jet's closing share price on Tuesday.

The deal is still subject to shareholder approval.

Etihad, which was set up 10 years ago, is keen to build alliances by taking stakes in airlines around the world. Last year, it bought 4% of Virgin Australia.

Even though passenger numbers and routes have increased rapidly in India in recent years, labour strife and mismanagement remain hurdles to profit growth. The only airline that consistently makes a profit in the domestic market is Indigo.

The Indian government eased restrictions on foreign ownership of companies in several sectors, including aviation, last year, in an effort to give support to the country's slowing economy.

More on This Story

Related Stories

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.