Tata Group may buy controlling stake in Jet Airways
New Delhi, Nov 13: India's largest business conglomerate, Tata Group, is reportedly looking at buying a controlling stake in Jet Airways. The exact details about the deal is not known yet, but reports suggest that Naresh Goyal, the chairman of Jet Airways, may sell a significant stake in the airline to the Tata Group.
Jet Airways is striving hard to boost revenues as the company is struggling due to higher fuel expenses and a weaker rupee. India's biggest full-service carrier posted its third straight quarterly loss on Monday (November 12).
Saurabh Agarwal, chief financial officer of Tata Sons Ltd, is leading the discussions while Jet Airways is represented by its chairman Naresh Goyal, said a Livemint report while quoting sources.
In the domestic aviation market, Indigo has a market share of 43.2% while Jet Airways has 14.2% as of September end. Tata Group has presence in India's aviation sector through Air Asia and Vistara. Vistara is Tata Group's joint vernture with Singapore Airlines Ltd.
Air Asia, with 4.4 % market share, and Vistara, with 3.8 % market share, command 8.2 % of the market. If the Tata Group manages to but a controlling stake in Jet Airways, then its market share may grow to to 24% from 8.2%, reported Livemint.
A combination of rising oil prices, high fuel taxes, a weak rupee, low fares and intense competition have slashed profits in the world's fastest-growing aviation market, which is clocking 20 percent annual passenger growth.