x

Abu Dhabi, UAEFriday 14 December 2018

Etihad-backed Jet Airways signs deal with Air France-KLM to develop India-Europe air links  

Enhanced codeshare also reinforces links with the US’ Delta Airlines, with implications for Gulf carriers

Jean-Marc Janaillac (L), the chief executive of Air France-KLM and chairman of Air France shakes hand with Naresh Goyal, the chairman of Jet Airways. Danish Siddiqui / Reuters
Jean-Marc Janaillac (L), the chief executive of Air France-KLM and chairman of Air France shakes hand with Naresh Goyal, the chairman of Jet Airways. Danish Siddiqui / Reuters

India’s Jet Airways, which is 24 per cent owned by Abu Dhabi’s Etihad Airways, agreed to expand its partnership with Air France-KLM to offer more routes between Europe and India, increasing competition with Arabian Gulf carriers for a bigger share of one of the fastest growing markets in the world.

“With over 1.2 million customers carried between India and Europe by the [Air France-KLM group] and our Indian partner, half of whom are travelling onward to North America, we are confirming our ambition to offer customers an enhanced network tailored to their needs,” Jean-Marc Janaillac, chairman and chief executive of Air France-KLM, said in a joint statement from the airlines on Wednesday night.

The three airlines signed an initial cooperation agreement in 2014, which was then expanded in 2016 with an extensive codeshare agreement for connections between Europe and North America, and Jet Airways’ hubs at Mumbai and Delhi via Air France-KLM’s hubs at Paris-Charles de Gaulle and Amsterdam-Schiphol.

The enhanced tie-up with Jet Airways gives Air France-KLM greater access to India, one of the fastest growing markets in the world where passenger traffic is rising at more than 20 per cent per year, and will intensify competition for Gulf carriers on Europe-India routes.

“India has always been the Gulf carriers’ ‘secret garden’ – they recognised the massive potential of this market and increased their coverage when nobody else was smart enough to do so,” said Andrew Charlton, managing director of Switzerland-based consultancy Aviation Advocacy.

“Now, [Europe and the US] are deepening their India network now aircraft can fly longer distances, so it’s a case of ‘welcome to the competitive real world’.

“This is a significant step by Air France-KLM and Jet Airways and it will call for a competitive response from the Gulf carriers.”

But aviation analyst Saj Ahmad said the impact on Jet Airways shareholder Etihad was likely to be minimal.

“Etihad will of course lose traffic out of India to Paris and Europe however they have a bigger regional intra-GCC network as well as many touchpoints across India themselves to offset this," he said.

“Add into this fact that Etihad is larger, has more European destinations and connections, passengers won't suddenly be flocking to Jet Airways because of this deal.”

_______________

Read more:

Etihad Airways to cancel Dallas-Fort Worth flights from March

Arab carriers hit out at US proposals to tax foreign airlines

Etihad Airways to launch flights to Azerbaijan

_______________

Mark Martin, founder and chief executive of Martin Consulting, said the deal was unlikely to have a detrimental impact on the Jet Airways-Etihad partnership. “It may, in fact, improve the earning for Etihad due to its equity holding in Jet Airways,” he said.

“The ‘bread-and-butter’ traffic to and from the Gulf will still be fed to Etihad by virtue its partnership with Jet. As Jet Airways broadens its revenue base, that income and dividend is paid to Etihad as well, so, clearly, this is something that might benefit the alliance.”

Etihad declined to comment on the agreement.

The expanded agreement between Air France-KLM and Jet Airways will offer travel options for 44 cities in India and 106 destinations across Europe through extended network and increased capacity between Paris, Amsterdam and India.

The recent launches of Amsterdam-Mumbai by KLM and Bengaluru-Amsterdam and Chennai-Paris by Jet Airways are the first examples of this partnership, the statement said.

The agreement is also intended to complement the Air France-KLM and US-based Delta Air Lines’ transatlantic partnership between Europe and North America, offering access to over 200 destinations in North America.

Jet Airways passengers will be able to book a single ticket for a trip to the US and Europe, and fly Delta, Air France-KLM or Virgin Atlantic for different legs of the journey, under the agreement.

Parallel to the agreement, Air France KLM Cargo and Jet Airways Cargo signed a memorandum of understanding aiming to strengthen their cooperation in the cargo sector.