Jet Airways Denies Talks With Lufthansa
By Neelam Mathews
As losses in the Indian aviation industry and debts build to insurmountable levels, India’s largest and most successful carrier, Jet Airways, may be preparing for a stake sale and eventual takeover, an airline official told The DAILY.
Jet Airways Executive Director Saroj Datta said no talks were being held and refused comment on how the airline sees consolidation in the Indian aviation industry changing in the coming years. Queries by The DAILY to Lufthansa remain unanswered.
The DAILY has learned, however, that numerous meetings between Jet Airways and Lufthansa have been held in Germany in the past few months, but none in India to ensure that the news is not disclosed.
While present rules do not permit Foreign Direct Investment (FDI) in an Indian airline by a non-Indian carrier, it is likely that once the new government takes over on June 2, FDI will be considered.
Signs of a decision on FDI coming close to fruition are obvious: Civil Aviation Minister Praful Patel said earlier this year that the government is looking at allowing foreign airlines to buy up to a 25% stake in domestic carriers. This is an about-turn from last year, when he said, “The proposal is still under examination.”
Brussels ConnectionWolfgang Mayrhuber, chairman of the Executive Board and CEO of Lufthansa, wrote in a recent letter to shareholders, “We remain convinced that air traffic will continue to grow over the medium and long term. We therefore review carefully the additional growth opportunities which arise, through partnerships for instance, and also through acquisitions, where they make sense,” Lufthansa made a number of key decisions on consolidation in 2008, including the planned takeover of Austrian Airlines and the phased acquisition of Brussels Airlines, a code-share partner of Jet Airways. Brussels Airport is also Jet’s hub for connections to North America, Europe and Asia.
“When all obstacles have been successfully cleared, both airlines (Brussels and Austrian) will provide us with the chance to connect the Belgian and Austrian markets better with the Lufthansa network.
“With its strong presence in Africa, Brussels Airlines is a valuable partner for us,” added Mayrhuber in the letter.
Lufthansa’s interest in Indian aviation goes back to the 1990s – it completes 50 years in India this year – when it entered a joint venture with the Modi Group to start Modiluft Airlines (now budget carrier SpiceJet) and a cargo venture with the Hindujas. Both had short lifelines.
Lufthansa also signed a strategic alliance with Air India in the mid-90s that led Mayrhuber to comment: “India an important market with great growth potential.
“With Air India, Lufthansa has found a partner which is optimally placed in its home market. Together the strategically outstanding position will be exploited in order to continue to be the leading European airline to and from India.”
Lufthansa invited Air India to be part of the Star Alliance and is now said to be in talks with Jet Airways on becoming a member.
Photo: Wikimedia
