Jet Airways India has already played a part in the decline of Etihad Airways PJSC. Could Tata Sons Ltd. be the next business empire to enter its dangerous web?
Prime Minister Narendra Modi has sought Tata’s help to rescue the struggling airline, people familiar with the matter told Anurag Kotoky and Bhuma Shrivastava of Bloomberg News this week. The conglomerate’s board would want state banks and India’s airports to take a haircut on some of Jet’s commitments to them before going ahead, one of the people said.
That caution over this bout of national service is hardly surprising. Jet has built up a substantial position in India’s domestic aviation market: It’s the biggest full-service carrier and the largest outright after the terrifyingly dominant budget carrier Interglobe Aviation Ltd., better known as IndiGo. Still, the smaller positions that Tata has staked out in joint ventures with Singapore Airlines Ltd. and AirAsia Bhd.are a much more sensible way of taking on the challenges of making money from getting India airborne.
Etihad thought its bottomless pockets would be enough to offset those problems and give it a toe-hold in one of the world’s fastest-growing markets. The bet turned out to be as bad as its other purchases of stakes in struggling airlines, and may yet result in a stricken Etihad in turn being swallowed up by its rivalrous compatriot Emirates.
16/11/18 DAvid Fickling/Bloomberg/Economic Times
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Prime Minister Narendra Modi has sought Tata’s help to rescue the struggling airline, people familiar with the matter told Anurag Kotoky and Bhuma Shrivastava of Bloomberg News this week. The conglomerate’s board would want state banks and India’s airports to take a haircut on some of Jet’s commitments to them before going ahead, one of the people said.
That caution over this bout of national service is hardly surprising. Jet has built up a substantial position in India’s domestic aviation market: It’s the biggest full-service carrier and the largest outright after the terrifyingly dominant budget carrier Interglobe Aviation Ltd., better known as IndiGo. Still, the smaller positions that Tata has staked out in joint ventures with Singapore Airlines Ltd. and AirAsia Bhd.are a much more sensible way of taking on the challenges of making money from getting India airborne.
Etihad thought its bottomless pockets would be enough to offset those problems and give it a toe-hold in one of the world’s fastest-growing markets. The bet turned out to be as bad as its other purchases of stakes in struggling airlines, and may yet result in a stricken Etihad in turn being swallowed up by its rivalrous compatriot Emirates.
16/11/18 DAvid Fickling/Bloomberg/Economic Times
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