Now, Etihad eyes stake in Kingfisher Airlines

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December 9, 2012

The reason Etihad is talking to Kingfisher is because the valuation being sought by Jet Airways was said to be too high

New Delhi/Bangalore: Kingfisher Airlines is said to be in talks with the Abu Dhabi-based Etihad Airlines for the foreign airline to acquire a stake in the domestic carrier.

December 9, 2012

The reason Etihad is talking to Kingfisher is because the valuation being sought by Jet Airways was said to be too high

New Delhi/Bangalore: Kingfisher Airlines is said to be in talks with the Abu Dhabi-based Etihad Airlines for the foreign airline to acquire a stake in the domestic carrier.

Sources indicated that Kingfisher Airlines Chief Executive Officer, Sanjay Aggarwal, and senior officials visited Etihad offices about a week ago.

Sources indicated that the reason for talking with Kingfisher was that the valuation being sought by Jet Airways was said to be too high. Kingfisher Airlines officials were not available for comment.

A few days ago, senior Government officials had indicated that Jet Airways was in talks with Etihad for stake sale.

It was not immediately clear as to what the status of the talks between Jet Airways and Etihad was.

Last year, Etihad acquired stake in at least three international airlines, including Virgin Australia, Germany’s Air Berlin and a 40 per cent stake in Air Seychelles.

A senior official of a global consulting firm, however, felt that it was unlikely that Etihad would acquire a stake in Kingfisher Airlines.

“The decision to sell now largely rests with the banks, which have lent money to the airline. Why should any global airline look at investing in Kingfisher, given its levels of debt. It will probably work out to be cheaper to start an airline from scratch then acquire Kingfisher,” the official felt. Kingfisher Airlines has been grounded since October 1.

The Directorate General of Civil Aviation suspended its operating licence on October 20. On Thursday night, the airline paid its employees’ salaries for May.

Meanwhile, Kingfisher Airlines has extended its flights cancellation till January 15, 2013 from December 15, 2012, airlines sources say.

Also, senior Etihad officials are said to have visited Kingfisher offices in various cities including Mumbai.


Courtesy: Reuters