Jet in direct Indian route buzz

Etihad is eager for India's second-largest airline, Jet Airways, to consider direct flights between the subcontinent and Australia once it gains a cornerstone stake in the carrier.

The speculation about Jet Airways flying here comes a month after flag carrier Air India began the only direct services from Delhi to Sydney and Melbourne.

The entry of a second Indian airline would pose the biggest challenge to Singapore Airlines, which has the lion's share of the market between Australia and India.

Etihad chief executive James Hogan has talked privately about his interest in Jet Airways launching direct services to Sydney or Melbourne, according to two well-placed sources.

The Middle Eastern airline is awaiting final approval from Indian authorities to complete the purchase of a 24 per cent stake in Jet Airways.

It is expected to have a large influence over Jet Airways' future direction despite its holdings falling well short of control.

Etihad has embarked on a strategy of buying minority stakes in airlines around the world, including Virgin Australia and Air Berlin, in order to broaden its global network.

It is also expanding aggressively on routes to India. Direct flights to Australia on Jet Airways would boost the feed of passengers onto Etihad's network.

Officials from airports including Sydney and Melbourne are also believed to have met Jet Airways executives to encourage the airline to fly to their airports.

The launch of direct flights from India to Australia would raise questions about the code-share agreement between Jet Airways and Qantas.

Etihad has a close alliance with Qantas' main rival, Virgin Australia, and has emphasised repeatedly that Australia's largest airline fended off its advances a number of years ago. Qantas launched an extensive alliance with Emirates early this year.

Qantas boss Alan Joyce said last month that forming an alliance with Emirates instead of Etihad was a "bit like being offered the bike before you are offered the BMW".

Both Etihad and Jet Airways declined to comment on the speculation about direct Indian flights.

Sydney Airport would not confirm any discussions with Jet Airways but it emphasised "India is a strong growth market for Sydney".