Jet Airways soars on forging strategic alliance with Etihad Airways

Jet Airways (India) is currently trading at Rs. 651.00, up by 77.15 points or 13.44% from its previous closing of Rs. 573.85 on the BSE.

The scrip opened at Rs. 688.60 and has touched a high and low of Rs. 688.60 and Rs. 642.55 respectively. So far 7,66,000 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 688.60 on 25-Apr-2013 and a 52 week low of Rs. 275.10 on 16-May-2012.

The current market cap of the company is Rs. 5,620.00 crore.

The promoters holding in the company stood at 80.00% while Institutions and Non-Institutions held 11.58% and 8.42% respectively.

Jet Airways (India) and Etihad Airways have forge strategic alliance under FDI policy of Government of India (GoI). Etihad Airways of the United Arab Emirates has agreed to subscribe for 27,263,372 new shares in Jet Airways at a price of Rs 754.74 per share. The value of this equity investment is $379 million and will result in Etihad Airways holding 24 percent of the enlarged share capital of Jet Airways. Etihad Airways’ wider overall commitment to Jet Airways includes the injection of $220 million to create and strengthen a wide-ranging partnership between the two carriers.

As part of this Etihad Airways paid $70 million to purchase Jet Airways’ three pairs of Heathrow slots through the sale and lease back agreement announced on February 27, 2013. Jet Airways continues to operate flights to London utilizing these slots. An amount of $150 million will be invested by Etihad Airways by way of a majority equity investment in Jet Airways’ frequent flyer program ‘Jet Privilege’, subject to appropriate regulatory and corporate approvals and final commercial agreements which are expected to be completed within the next six months.

Under the strategic partnership, which will be subject to full regulatory and shareholder approval, the airlines will gradually expand existing operations and introduce new routes between India and Abu Dhabi, providing an ever wider choice to the travelling public. They will combine their network of 140 destinations, with Jet Airways establishing a Gulf gateway in Abu Dhabi and expanding its reach through Etihad Airways’ growing global network.

Besides, passengers from 23 cities in India will benefit from direct connections to international destinations. New flights from Jet Airways’ home hubs and metro airports will further strengthen its current operations from these airports. Jet Airways’ vision continues to be to develop Delhi and Mumbai airports as its primary home hubs and connecting them to Asian, European and other regions.