December 11, 2012
Etihad is in negotiations with grounded Indian carrier Kingfisher Airlines over becoming a minority shareholder in the airline. Kingfisher confirmed in a notice to the Mumbai stock exchange that it is “in discussion with various investors, including Etihad Airways, for equity investments in the company.” Kingfisher cautions, however, that “no agreement has been reached either with Etihad or any other airline and the matters are merely at a negotiation stage.”
Kingfisher is not the only Indian airline with which Etihad has been linked. The Abu Dhabi-based airline also is understood to be negotiating a similar deal with Jet Airways. The Indian government recently loosened restrictions on foreign ownership to 49%.
Etihad has been expanding organically, but also by way of investments. It currently holds stakes in Virgin Australia, Air Seychelles, Aer Lingus and Air Berlin. Etihad CEO James Hogan has made repeatedly clear that he is open to other investments.
India is a key market for Etihad given the geographic proximity and large traffic flows. Because of its financial difficulties, Kingfisher has been grounded since October and its license is currently suspended. Several of its aircraft have been impounded, the latest has been an ATR 42.
The airline had launched the process of joining the Oneworld alliance, but suspended the move earlier this year. Etihad’s European affiliate Air Berlin is in Oneworld, but Etihad itself is independent. It has a code-share deal with Jet Airways.
A320-200 photo: Kingfisher