is talking to financially struggling Kingfisher Airlines about becoming a minority investor, according to two separate industry sources.
The situation is fluid, one source states, but intense negotiations are continuing and a decision could come quickly, once India’s restrictions on foreign airline ownership are relaxed. Etihad says, “We never comment on speculation of this nature, except to say that we talk regularly and frequently to many airlines and a range of businesses from all over the world about issues and opportunities.”
Kingfisher’s financial situation has deteriorated dramatically in recent weeks. The airline was forced to ground more than half of its fleet, bank accounts have been frozen, and talks with banks about new credit are ongoing. The airline is hoping that the Indian government soon will raise the foreign airline ownership limit to 49%, which would open the way for significant investment by a new partner.
Kingfisher owner Vijay Mallya is reportedly also talking toparent International Airlines Group (IAG), which says: “Our aim is to be a global airline group, and we are pleased with any steps toward full liberalization of the aviation industry. The process to allow foreign airlines to invest in Indian carriers has not yet been fully approved so it would be wrong to speculate about IAG’s interest in any Indian airlines at this stage.”
Kingfisher was due to join the Oneworld alliance, in which IAG units BA andare core members, on Feb. 10, but the process was put on hold given Kingfisher’s financial state.
Etihad has been active in terms of acquisitions lately. The carrier bought a 29% stake inin December and a 40% stake in Air Seychelles in January. Etihad has also been linked with and , both carriers are partially up for sale.