Etihad is strapped in too tightly at Jet Airways. The ailing Indian carrier has stopped flights to Abu Dhabi, the hub of its Middle Eastern shareholder. Even with almost half its fleet grounded for failing to pay aircraft lessors, it looks like an attempt to strong-arm support for a restructuring. It’s a stark reminder that the Gulf emirate has more to lose than just its equity.
Investors know the risk of buying any stock is a fall to zero. For Etihad, however, that goes beyond the 24 per cent stake in Jet it bought in 2013 for about $600 million, a strategic purchase which included control of the frequent-flyer programme. The airline had been ferrying passengers from India to Abu Dhabi, and then into Etihad’s own network to further destinations.
