The sources did not want to be named as the discussions are private.
Jet, which is the country's biggest full service carrier by market share, is in desperate need of cash. The 25-year-old airline, founded by Naresh Goyal, owes money to lessors and vendors, has delayed salary payments to pilots and senior executives and is cutting flights on non-profitable routes to save money.
Etihad has already come to Jet's rescue once when it picked up a 24 per cent stake in the carrier in 2013 but the situation is different this time.
While the Abu Dhabi-based carrier is invested in Jet, it has lost money in other airline ventures such as Alitalia and Air Berlin and may be wary of loosening the purse strings again, said another source.
Also, with tighter lending norms and a liquidity crisis looming in the country, bankers may be hesitant to lend more to the struggling airline.
Jet and Etihad did not immediately responded to Reuters' emails seeking comment.