Tata Group Seeks to Buy Jet Airways

Jet Airways, which has been facing turbulence from rising oil prices and a depreciating rupee and is struggling even to pay salaries, is now facing a takeover bid by the Tata Group. As per reports in the media, the Tata Group wants complete control over Jet Airways and the exit of its current promoters, the Naresh Goyal family. It has rejected the proposal for part-ownership or joint venture. Jet Airways representative told the media that the news report was speculative.

Jet Airways Chairman Naresh Goyal and his family currently own 51 per cent of the airline and in 2013, Abu Dhabi-based Etihad Airways picked up a 24 per cent stake in the airline. A few months ago, there were reports that Etihad might sell off its entire stake by the end of this year, but the Middle East carrier has issued a denial. The Tata Group currently operates two joint venture airlines in India namely Vistara, with Singapore Airlines and AirAsia India with the Malaysian budget carrier AirAsia Berhad. Overall, the Indian aviation sector is in a bind. On the one hand, as per the Directorate General of Civil Aviation (DGCA), although domestic air-passenger traffic has grown by around 16 per cent annually over the past decade, this growth has been largely profitless, as intense competition and price sensitivity have forced airlines not to raise fares.