Troubled airline Jet Airways is nearing a deal with Etihad Airlines, the national carrier of the United Arab Emirates, for infusion of more capital and soft loans, multiple reports indicate.
Amid reports of rescue plan talks between executives of the Middle Eastern airline and the Indian carrier's creditors, Jet's chief executive officer Vinay Dube hinted at an imminent deal at a meeting with the airline's pilots.
Dube said Jet Airways would bring on board a new investor in two-three months. Jet management assured the National Aviator's Guild that the cash-strapped airline would release the pending salaries in a short while before the board reconstitution.
Though some media houses citing unnamed sources have reported that the deal between Etihad and Jet is all but done, there has been no official confirmation in India or the UAE.
Aviation sources told a news agency that at the meeting, executives of Etihad and Jet spoke to some of the airline's bankers in Mumbai about ways to address the cash flow issues and evaluate the carrier's business plan.
Another source said Etihad that owns 24 percent stake in Jet Airways is also considering investing fresh funds in the airline if it can agree on the structure. No deal has yet been finalised, according to this source.
Jet, India's biggest full-service carrier by market share, needs a fresh infusion of cash to keep airborne after talks with Tata Sons, which has the majority stake in Air Asia India and Vistara, over the past few weeks fell through. The debt-hit airline, founded by Naresh Goyal, has delayed salary payments to pilots and senior executives and has also cut several flights to non-profitable routes.
Jet has faced turbulence because of high fuel prices, a weak rupee and mortifying price wars from no-frills airlines like IndiGo. Indian aviation market, which is one of the world's fastest-growing domestic aviation markets, has found bruising price wars.
The ability of the Abu Dhabi-based airline, which rescued Jet once by picking up a 24 percent stake in 2013, to do a repeat is extremely limited by the losses it suffered from its involvement in Alitalia and Air Berlin, sources say.
Indian banks are also facing a liquidity squeeze and close regulatory monitoring, restricting their capacity to advance funds.