Kingfisher Airlines has confirmed it is in talks with Etihad Airways over potentially taking an equity stake in the troubled India carrier.
A number of other investors are believed to be interested in the airline, which is battling for survival.
Kingfisher has £870 million in debt and is looking to raise funds after lenders refused to give fresh loans.
The airline’s financial problems have also prompted strikes over unpaid wages.
Authorities have grounded planes, while tax authorities have also begun confiscating aircraft.
“We would like to clarify that the company is in discussion with various investors, including Etihad Airways, for equity investments in the company,” Kingfisher said in a statement.
The company did not provide any details about the size of the investment.