From left to right: Captain Hameed Ali, acting chief executive, Jet Airways; James Hogan, president, Etihad Airways; Naresh Goyal, chairman, Jet Airways; and James Rigney, chief financial officer, Etihad, seen after the announcement of their strategic equity alliance

Abu Dhabi-based Etihad Airways has confirmed it will take a stake in Jet Airways of India, ending weeks of speculation about a possible deal.

Etihad said the move would allow it to take a bigger foothold in the growing Indian market.

It follows a series of equity investments around the world from the ambitious carrier, with Etihad also having taken stakes in Aer Lingus, Seychelles Airways, airberlin, and Virgin Australia.

The latest $379 million investment is the first by an overseas operator in an Indian airline since ownership rules were relaxed.

The government initiative was designed to provide carriers in India with deep-pocketed global partners.

Following the deal Jet is likely to benefit from strategic expertise, cheap financing and possible fuel import benefits in addition to the capital injection.

“The deal is expected to bring immediate revenue growth and cost synergy opportunities, with our initial estimates of a contribution of several hundred million dollars for both airlines over the next five years,” said James Hogan, Etihad chief executive.

Etihad will buy 27.3 million new shares of Jet at 754.74 rupees per share, a 31.7 per cent premium to Jet’s closing share price on Tuesday, and acquire 24 per cent of Jet’s expanded share capital.

Etihad will also invest an additional $150 million in Jet’s frequent flyer program and spend $70 million to buy Jet’s three pairs of Heathrow slots through the sale and leaseback agreement announced in February.