Sharjah-based Etihad Airways is in final stages of talks to pick stake in either Jet Airways or grounded Kingfisher Airlines.
"A deal could be announced by next week," a senior government official said on Monday. According to the official, Etihad has not made any final decision in this regard. "They are talking to both."
Etihad board is also likely to meet next week to discuss the issue.
Kingfisher, which grounded all its flights due to huge debt, is seeking to sell a stake in the carrier. Jet is also desperately looking to cut its rising debt by stake sale.
According to industry insiders, any stake sale deal would help both the Jet and the Kingfisher to not only cut debt but also benefit from the international operations of the buyers.
"Unbelievable as it might sound, Kingfisher at the moment stands a better chance, but the price has to be right," said Rajan Mehra, an industry expert and the India head of the US-based private jet operator Universal Aviation.
"Etihad will be able to have control over the airline. Right now, what they want is control," said Mehra, who previously headed Qatar Airways' India operations.
Jet and Kingfisher officials declined to comment while Etihad officials were not available.
Etihad, which is on an expansion mode globally, recently bought stakes in Air Berlin and Virgin Australia, and is now looking to extend its geographical reach to India and other Asian markets.
The airline has been seeking a greater pie in the lucrative Indian market to cater for the traffic to the Gulf and west Asian countries.
Shares of Jet Airways were on Wednesday trading 0.11 per cent higher at Rs 625.55 on the Bombay Stock Exchange. Kingfisher Airlines scrip was at the same time trading in red - down 2.82 per cent at Rs 16.55 on the BSE.
In association with Mail Today