Jet Airways and Air France-KLM announced an “enhanced cooperation agreement” that would see India’s largest private carrier strengthening its commercial ties with the European aviation group beyond a code share pact.
“This agreement strengthens the partnership built between the three airlines since 2014,” the alliance partners said in a joint statement on Wednesday. Customers would benefit from multiple travel options — via the European hubs of Amsterdam and Paris and the European airline group’s transatlantic venture partner Delta Air Lines — and “seamless service” throughout the three partners’ networks spanning 44 cities in India and 106 destinations across Europe.
The pact helps Jet Airways bolster its connectivity to Europe and offer its North America-bound customers more options on connections, beyond its existing equity part-owner Etihad Airways’ Abu Dhabi hub. For the Franco-Dutch combine, the tie-up helps it compete better for a bigger share of the fast-expanding Indian market against European rivals including Lufthansa, and vie with the Gulf-based carriers as well.
“Air France-KLM and Jet Airways are launching the first cooperation agreement of its kind on the India - Europe market, one of the markets at the heart of the group’s strategy for the coming years,” Jean-Marc Janaillac, Chairman and CEO of Air France-KLM, was quoted as saying in the statement. “With over 12,00,000 customers carried between India and Europe by the 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.”
Jet Airways chairman Naresh Goyal said the pact with Air France-KLM was ‘purely’ commercial and aimed at enhancing connectivity from India to Europe, adding that there was no equity angle to the relationship. He also asserted that ties with Etihad, which owns 24% stake in Jet, remained healthy.
“We have done well with Etihad and we will continue with that role,” Mr. Goyal said.
Jet Airways’ latest accord with Air France-KLM could mark a strategic shift away from its ties with Etihad, according to aviation industry consultant Kapil Kaul.
“One can expect more strategic developments which could include Skyteam membership for Jet Airways and investment from Delta,” said Mr. Kaul, CEO, Indian subcontinent & Middle East, Centre for Asia Pacific Aviation (CAPA). “The partnership with Etihad will increasingly become less strategic and relevant.”
Jet Airways CEO Vinay Dubey said the agreement would help the partner airlines enhance their load factor and maximise efficiency. “This deeper cooperation also means lower airfares for cusomters,” he added.
CAPA’s Mr. Kaul said the pact was a big strategic boost for Jet Airways, which would gain access to both capacity and multiple gateways.
“The development enhances market power and customer value significantly to Europe and USA. I see this a revenue positive deal for Jet. It provides them very effective competitive strength and reduces economic risks,” he added.
“Going forward we are expecting more consistency from Jet’s long haul strategy post deal. Since 2005, Jet has moved from hub driven operations of Brussels first and then Abu Dhabi. Now it is heading to a multiple gateway strategy of Abu Dhabi/LHR/Paris/ Amsterdam. With new team and strategy in place and possible recapitalisation, which is critical, I see Jet emerging stronger. Also significant recapitalisation should be a priority,” he added.
Besides this Air France-KLM Cargo and Jet Airways Cargo have also signed an MoU to further strengthen their cooperation in the cargo sector.
