Aviation Majors, PE Firms Eye Stake In Jet Airways

Global carriers Lufthansa and KLM-Air France with private equity (PE) funds including the Blackstone Group, KKR & Co and TPG Capital have joined the race along with US airlines Delta to invest nearly USD 200-250 million in Jet Airways.

Jet Airways is looking to raise capital to fund operations, increase efficiency to be competitive amidst global headwinds, reported a leading business daily.

Post the relaxation of norms for investment in the aviation sector, the government has allowed 100% FDI in scheduled commercial airlines, but foreign airlines are prohibited from holding an equity stake in Indian carriers above 49%. With Etihad already on board, Jet Airways only has limited headroom to bring in another strategic partner by selling up to 24% stake in the airline.

It is expected that Etihad Airways, which is the second largest shareholder in Jet Airways, may also infuse fresh capital into the company.

For international carriers like Lufthansa and KLM- Air France, an equity partnership will give them access to Indian aviation market.

Even though PE firms stay away from such volatile industry, investors like TPG have tapped the sector extensively across the world. In India, TPG has explored investments in both Jet and Kingfisher in the past. Both KKR and Blackstone have backed air taxi operators in Asia.

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