Etihad control won't hit Jet Airways' ties with its European, US partners

A greater say by Etihad on Jet Airways affairs is unlikely to impact the latter’s relationship with its European and US partners — Air France-KLM, Delta and Virgin Atlantic.

 

“Our relationship with Jet Airways doesn’t depend on the ownership. We are exploring to further strengthen our partnership with Jet in the market,” said Juha Jarvinen, the newly-appointed executive vice-president, commercial, Virgin Atlantic. Jarvinen didn’t rule out a neutrality pact in the future.

 

In an apparent change in strategy, Jet Airways had shifted its European hub from Brussels to Amsterdam in 2016 as it signed an extensive commercial co-operation agreement with Air France-KLM. It also signed code-share pacts with Delta and Virgin Atlantic.

“The partnership with Air France-KLM and Delta is bringing value to Jet and whoever is in-charge of the airline will only be keen to make it profitable. There is a strong case to continue the partnership as it is valuable to Jet. In the near term, I don’t see any danger to the partnership but then Air France-KLM would have to adapt to the situation in case Jet’s new management decides to break the alliance,” said an industry expert aware of the joint venture plans.

Pieter Elbers, CEO of KLM Airways, had last September said the Air France-KLM joint venture was in talks for deepening commercial tie ups with Jet, including a common trade policy, which would give them the ability to align their incentives and agreements with travel agents. The two airlines have already aligned corporate contract policies.

 

“From the experience that we had in the US, China and Brazil, we see that the best proposition was given to customers when we had a strong local partner. With that vision, we started engaging with Jet. Then, the airline moved its European gateway to Amsterdam, followed by the enhanced revenue cooperation agreement,” he said.

 

“It brought a lot of connection, like, we got a lot of feedback from secondary Indian cities,” Elbers added.

 

Currently, the three airlines in total have 65 flights operating in India, Amsterdam, and Paris.

 

Jet operates 21 flights to KLM’s hub at Schiphol Airport in Amsterdam in addition to the 11 flights of KLM from India.

 

At Paris, there are 21 flights from Air France and another 12 flights from Jet.

 

Echoing the sentiments, Jarvinen said that Virgin’s partnership with Jet Airways has been quite fruitful and saw 160 per cent growth in both volume of passengers and revenues from Mumbai for its trans-Atlantic routes.

 

Last year, Jet launched a five-day weekly flight between Mumbai and Manchester, which can feed Virgin Atlantic’s flights to North America.

 

Experts said that the partnership has been commercially beneficial for both sides. “The arrangement has been favourably received by passengers since it gives multiple options to passengers travelling from India to parts of Europe & North America,” said Ameya Joshi, founder of aviation blog Network Thoughts.

 

Jet has five daily wide-body aircraft to Amsterdam and Paris from India. It also has a daily service between Amsterdam and Toronto. Over half of its passengers to Amsterdam or Paris travel onward on flights operated by Air France-KLM or Delta and these carriers feed Jet’s domestic routes.

 

Among other routes, the Chennai-Paris one has been the weakest among its European routes (since it does not have onward connections from Chennai).

 

But in the last few months, traffic has picked up and gets a load of over 80 per cent, an airline source said.

 

The partnership has enabled Jet to tap the corporate business of its partner airlines in Europe and secure high yielding premium traffic.

 

The airlines have aligned corporate contract policies and are planning to have common contracts in India and Europe.



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