The biggest gainers of the deal between Jet Airways and Etihad could well be those living in the mid-sized and smaller cities of India.
Post the deal, Jet plans to connect close to a dozen of these cities to destinations across the world through Etihad?s home base of Abu Dhabi, which will become the new hub for the Indian carrier.
?People in Tier 2 and 3 cities will see enhanced global connect, which may give a fillip to trade and tourism in those locations. They can expect more competition, better regional connectivity, higher efficiency and lower fares,? says Amber Dubey, Partner and Head-Aviation at global consultancy firm KPMG.
In three years from now, Jet Airways has plans to connect 23 cities to the world through Abu Dhabi. The cities include Patna, Baroda, Jaipur, Lucknow, Kozhikode, Amritsar, Baroda, Jaipur and others, including the metro cities. A Jet Airways source said that they have plans to induct 54 aircraft over a period of three to five years to support their expansion plan. Of the 54 aircraft, 46 will be short-haul Boeing 737s, 9 medium-haul Airbus 330s and 5 long-haul Boeing 777s, which the airline had leased out, will also come back.
?Short-haul Boeing 737s will be used to connect smaller cities, with less international passenger count, to Abu Dhabi and then the passengers will be routed to the international network of both Abu Dhabi and Etihad. Operating smaller planes will give us the freedom to offer competitive fares,? he said adding that such a strategy will give the muscle to compete with various other international carriers. Jet currently has 101 aircraft in its fleet and over 60 per cent of them are short-haul aircraft.
The deal has also brought increased bilateral entitlements for the carriers from both sides. The new entitlements have increased by 36,670 seats from the current 13,000 seats. Analysts feel that the Indian market has lot of potential and airlines can offer other products. ?Nothing prevents incumbents from offering non-stop flights to destinations like US, EU, Australia, South Africa etc. Passengers may prefer non-stop long haul flights than taking a circuitous and time consuming route through hubs in West Asia and South East Asia,? said Dubey.
Others also feel that the West Asian carriers will compete among themselves for the share of the Indian market. ?The Indian carriers may not see an impact because they have a brand value among Indian fliers. But we will see West Asian carriers competing among themselves, as the number of destinations they operate from are also the same (see chart),? said a ministry official adding that Air India can build on its strength in the direct long-haul sector.