NEW DELHI (Reuters) - India’s Tata Group is in talks to buy a majority stake in beleaguered carrier Jet Airways (JET.NS) and its loyalty program, television news channel CNBC-TV18 reported on Monday, citing sources.
Tata Group aims to buy the 51 percent stake in the airline owned by Jet Airways founder, Naresh Goyal, and Etihad Airways’ 24 percent stake, the station reported.
Tata said in a statement that it would not comment on speculation. Jet Airways did not respond to a request for comment.
Shares in Jet Airways surged on the news report, closing up 10 percent on Monday.
India’s aviation market is growing at 20 percent annually, but a combination of rising oil prices, high fuel taxes, a weak rupee, low fares and intense competition have driven carriers into the red.
Jet Airways is making losses and is struggling to pay salaries and meet aircraft lease payments. The airline, which is seeking a cash injection, said in August it would cut costs in excess of 20 billion rupees ($274 million) in two years and planned to raise funds by selling a stake in its frequent flyer program.
Tata already owns two airline ventures in India - full-service carrier Vistara, in partnership with Singapore Airlines (SIAL.SI) and AirAsia India, along with AirAsia Berhad.
Tata aims to merge Jet with Vistara, sources told CNBC-TV18. It would also buy Jet Airways’ loyalty program Jet Privilege.
($1 = 73.0750 Indian rupees)
Reporting by Aditi Shah; Editing by Martin Howell and Susan Fenton