Tata Sons only in preliminary talks with Jet airways for a deal

Shares in debt-laden Jet Airways surged on Friday for a fourth straight day after media reported that Tata was close to making a takeover bid for the airline, which flies to destinations including Hong Kong, Dubai, London and New York.

“Over the last few days there has been growing speculation in the print and electronic media about Tata’s interest in Jet Airways,” Tata said in a statement. “We would like to clarify that any such discussions have been preliminary and no proposal has been made.”

Jet Airways’ shares closed up 7.9 pc at Rs 346.5 ($4.82), their highest close in four months. Tata already owns two Indian airlines but has less than 10 per cent of the country’s aviationmarket. A deal with Jet would transform Tata from a fringe player into the country’s dominant, full-service international carrier, but would also give it a loss-making company that is struggling to stay afloat and owes money to vendors and employees alike.

Jet is 24 per cent owned by Etihad Airways. The Abu Dhabi-based carrier is keeping all options open but would want to retain its stake even if Jet is sold to another airline or the Tata group, a source aware of the matter told Reuters. India is the world’s fastest-growing domestic aviation market with 20 pc annual passenger growth but rising fuel costs, a weak rupee and intense competition have wrought havoc on the finances of Jet andother carriers.