The deadline for submission of expression of interest for buying a stake in Jet Airways ends tomorrow and a lot of names are doing the rounds for the interested parties. Here is a quick check on the top five.
Indigo Partners LLC is a Phoenix-based private equity firm which holds a majority stake in several low-cost carriers across the world. It has four ultra-low-cost airlines in its portfolio, namely US-based Frontier Airlines, Chile-based JetSMART, Volaris of Mexico and Wizz Air of Hungary. A few months ago, the group has also decided to revive a former charter airline of Canada named Enerjet into an ultra-low-cost carrier.
Indigo Partners had also started negotiations with Iceland’s low-cost airline Wow air but the deal fell through later. In 2017, the firm entered into an agreement with Airbus for the manufacturer’s single largest order of 430 A320neo family aircraft worth $49.5 billion. Airlines in the Indigo Partners family had previously placed orders for a total of 427 A320 Family aircraft. The fund has shown interest in Kingfisher Airlines and SpiceJet in the past.
Texas-based TPG Capital is an investment company with a broad range of interests spanning from telecommunications to healthcare. The love for beleaguered airlines is not new for TPG. This is the third time that the fund has shown interest in a struggling Indian carrier after having considered investment in Kingfisher Airlines and then in SpiceJet. In fact, in the case of SpiceJet, the group did spend considerable time assessing the airline but the deal fell through.
India’s first sovereign wealth fund, National Investment and Infrastructure Fund, was set up in February 2015, to invest in commercially viable projects, both greenfield and brownfield. The group was one of the bidders in the privatisation drive of six airports of Airports Authority of India (AAI) but did not emerge as the highest bidder. NIIF was also outbid by other bidders in the race to win the development, operation and management rights of Bhogapuram airport. NIIF is also reportedly in talks with GVK Group to buy a stake in Mumbai airport.
Think Equity-Redcliffe Capital
Redcliffe Capital is a venture capital and special situation investment firm and has offices in Gurugram and London. While the firm has a long portfolio list of companies from ecommerce, FMCG space among others, the company’s website does not show any airlines or airports in its portfolio. ThinkEquity is a boutique investment bank created by experienced professionals that have worked together for over a decade, collectively financing over $50 billion of public and private capital raises, restructurings, and mergers and acquisitions
Etihad is UAE’s second largest airline after Emirates. As of August 2018, the airline had a fleet of 110 planes and served 91 destinations. The airline has a minority shareholding in Air Serbia, Air Seychelles, Virgin Australia and Indian carrier Jet Airways India Ltd. The airline had bought 24 percent stake in Jet Airways in 2013 for over Rs 2,000 crore, shortly after India changed norms to allow foreign airlines to invest in domestic carriers. The deal was further sweetened as simultaneously India and UAE had also expanded weekly seats on flights between the two countries by as much as four times. The stake sale to Etihad had helped Jet Airways in paring its debt then. However, in recent years, the airline’s investment in struggling carriers has not yielded positive results with a 49 percent holding in Alitalia and partnership with Air Berlin, ending in the carrier going bust.
(While these parties are expected to have submitted an expression of interest. Lufthansa is a potential player as well. Lufthansa is the largest German airline. It has ten wholly-owned subsidiary airlines and three partly-owned carriers along with seven more subsidiaries in the aviation sector. This makes Lufthansa the largest European airline in terms of passengers carried. In totality, the group is believed to have over 700 planes.)