India’s Jet Airways has sold a 24% stake to Abu Dhabi-based Etihad Airways, the first such deal with a foreign carrier since last year’s change to India’s ownership laws.

Under the strategic equity alliance signed April 24, the Middle East carrier will subscribe to 27.3 million new shares of Jet Airways at 754.74 rupees ($13.92) per share. The two airlines have been negotiating the stake sale since September 2012.

“The value of this equity investment is $379 million and will result in Etihad Airways holding 24% of the enlarged share capital of Jet Airways,” an spokesman for Indian airline tells Aviation Week.

Majority ownership of Jet Airways will remain with Indian nationals and Naresh Goyal, Jet’s founder and non-executive chairman, will hold 51% of the airline after the deal, which is subject to shareholder approval.

Jet’s board of directors has approved the deal.

“This partnership with Etihad Airways is a win-win situation for all our stakeholders, especially our guests, who will now have access to a much-expanded global network,” says Goyal. The move will also enable the company to service its debts and provide passengers with better connectivity.

Etihad President and CEO James Hogan says the partnership will bring significant benefits and opportunities for global growth to both airlines.

“It is expected to bring immediate revenue growth and cost-synergy opportunities, with our initial estimates of a contribution of several hundred million dollars for both airlines over the next five years. The Indian market is fundamental to our business model of organic growth partnerships and equity investments. This deal will allow us to compete more effectively in one of the largest and fastest-growing markets in the world,” Hogan says.

Current estimates predict the Indian market to grow to 42 million travelers over the next five years, a rate of 10% per year.

Jet reported a net profit of 850 million rupees in its fiscal third quarter, a marked improvement on the 1 billion rupees net loss in the previous third quarter. “This transaction further strengthens the balance sheet of Jet Airways and, more importantly, underpins future revenue streams, which will accelerate our return to sustainable profitability and liquidity,” Goyal says.

Etihad’s overall commitment to Jet includes an injection of $220 million to create and strengthen a wide-ranging partnership between the two carriers.

The Abu Dhabi-based airline also paid $70 million to purchase Jet’s three pairs of slots at London Heathrow Airport through a sale-leaseback agreement announced on Feb. 27. Jet continues to use those slots to operate London services.

Etihad invested $150 million through a majority equity investment in Jet’s 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.

The deal calls for Jet to establish a gateway in Abu Dhabi, and expand its reach through Etihad’s network.

Additional benefits for both airlines will come from synergies and cost savings in fleet acquisition, maintenance, product development and training. The airlines will explore joint purchasing opportunities for fuel, spare parts, equipment and catering supplies, as well as insurance and technology support.

Other areas of cooperation will include joint training of pilots, cabin crew and engineers, as well as maintenance of common aircraft types.

Etihad currently flies to nine Indian destinations, including Indira Ghandi International Airport in Delhi, Chennai International Airport, Chhatrapati Shivaji International Airport in Mumbai, Calicut International Airport in Kozhikode, Trivandum International Airport in Thiruvananthapuram, Rajiv Ghandi International Airport in Hyderabad, Bengaluru International Airport, Sardar Vallabhbhai Patel Airport in Ahmedabad and Cochin International Airport in Kochi, with a total of 59 flights per week.

Etihad also has invested in Air Berlin—which has linked its Boeing 787 fleet plan with Etihad’s—Air Seychelles, Virgin Australia and Aer Lingus.

777-300 photo: Boeing