Without giving any details of the possible deal, Civil Aviation Minister Ajit Singh said on Thursday that Abu Dhabi based Etihad Airways is in talks with Jet Airways for a potential investment in the Indian carrier.
After a meeting with Jet Chairman Naresh Goyal and Etihad Chief Executive James Hogan, Singh told the reporters that the government's role was to ensure that deal between the two takes place within the regulatory framework.
"As you all know also that Jet Air and Etihad have been in consultation for quite some time. So, Etihad delegation was here today. They are discussing the details with Mr. Naresh Goyal here from Jet. So, we discussed the weather in Abu Dhabi and Delhi.
(Q. When will the deal be announced?)
A. That's upto to them.
(Q. What percentage has been finalized?)
A. "See, that's between Jet and Etihad. All the government's role is to make sure that whatever agreement they come to is within the regulatory framework allowed by the government," said Singh.
The deal, if closed, will be the first since India relaxed ownership rules in September 2012 and allowed foreign investors to buy up to 49 percent in domestic carriers that are battling stiff competition and high operating costs.
Etihad is in talks to pick up a 24 percent stake in Jet, India's No. 2 carrier, for up to $330 million, a government source said earlier this month.
Singh also said that the government's main objective should be to ensure that the aviation sector as a whole should grow.
"The government allowed FDI (Foreign Direct Investment) because looking at the whole aviation sector we need the foreign management expertise, their reach, their technical expertise and that's why FDI has been allowed. Looking at the aviation sector I think it's a very good move that Jet Air and Etihad are talking. Our concern is that the aviation sector as a whole should grow. Competition should also grow," he added.
Jet has previously said it was in talks with Etihad, but the terms of the deal were not finalised.
Etihad and Jet have a code-sharing agreement, and a tie-up could make Jet a more formidable competitor to state-owned Air India, while strengthening Etihad's position against Dubai-based Emirates Airline, which carries a big chunk of the traffic between India and the Middle East. (ANI)