The Etihad Group has tried to buy its way into closed markets by snatching up shares of the industry's weaker airline properties. That big global gamble doesn't seem to be paying off.
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View Of Airport Ground Stewardess Loading In Passengers Goods Into Jet Airways Passenger Airplane At Loading And Unloading Gate Of Schiphol International Airport In Amsterdam The Netherlands Europe photo credit: GettyThe growth of low-cost competition in India, a rise in fuel prices and an unfavorable exchange rate contributed to the $1.2 billion debt that the airline faces today.
Through his flight distribution business, Jetair, Naresh Goyal, founder of Jet Airways, is reportedly working withEtihad Aviation Group, which currently holds 24% of Jet Airways, has hesitated to increase its stake andfor additional financial support. Etihad had wanted Goyal to cede control of the airline, which Goyal agreed to in March of this year. However, the situation has only worsened and Jet Airways is still waiting for a rescue package.
Etihad's influence on these partners, Jaeger says, has not always been positive in part because the objective of the investment has been to strengthen Etihad and its base in Abu Dhabi. “[Etihad] did invest in Jet Airways with the intent of buying feed for its global air hub ambitions in Abu Dhabi, and feeding that hub was not necessarily in Jet’s best interest,” Jaeger says.
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