Jet Airways has announced a new enhanced cooperation agreement with the Air France-KLM Group, a move that will boost connectivity between 106 European cities and 44 domestic destinations. “This enhanced cooperation agreement between Jet, Air France-KLM Group represents the next stage of our journey of offering better connectivity across our combined global networks,” Jet Airways chairman Naresh Goyal said announcing the partnership here today. This is the first major announcement by Jet, the second largest domestic airline by revenue, after it relocated its European hub to Amsterdam from Brussels in March 2016. The agreement, which primarily deepens their already existing codeshare partnership signed in 2014, will further boost connectivity between India and Europe as well as between Europe and North America through a similar pact between the three networks and Delta Air Lines of the US.
Goyal, however, said the partnership with the Gulf carrier Etihad, which holds 24 per cent stake in his airline, will continue and will not be “disturbed.” “I believe this partnership with AF-KLM will be very good for us. We’ve a great relationship with Etihad, which will continue and will not be disturbed at all,” he said. “We’ve done well with Etihad and will continue to do so. There are 70-80 lakh Indians in the Gulf. Travel demand between India and the West will be both via the Gulf route and Europe, and also direct to Europe,” Goyal added. Whether the new partnership could lead to investment s in Jet from the European airlines group, Goyal quipped, “one does not know what happens in future.” Significantly, Goyal had earlier categorically ruled out selling stake to another airline/investor or Etihad exiting from the joint venture.
“We’ve no plans to sell stake to another investor. Also, our partner Etihad has no intention to exit Jet,” Goyal had said on September 11. The new route pact apart, the existing tie-up between the AF-KLM and Delta will help connect India to a Trans- Atlantic network with hubs in Amsterdam and Paris. As part of the agreement, Jet 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. Flights will be “metal neutral,” which means revenue will be shared regardless of whose aircraft is deployed. Unlike interline or codeshare agreements, a joint venture follows the principle of metal neutrality in which revenue/profit is shared on a pre-determined basis on select routes and it does not matter which airline flies a passenger.
The partnership is expecting an incremental revenue to the tune of USD 1 billion Goyal said without offering a timeline for achieving this. He also said his airline has applied for securing a slot in the Delhi airport to launch a fourth flight to London, which will help it cater to the US traffic through Virgin Atlantic. Goyal said he will speak to the group chairmen of AF- KLM and Delta to explore the possibility of deepening this cooperation through joint purchase of fuel and closer tie-ups in engineering and maintenance all of which will be revenue accretive. According to AF-KLM, as many as 1.2 million are expected to fly between India and the Netherlands via the Amsterdam and Paris hubs of the two carriers in 2017, which will get a further leg-up with this tripartite partnership.
With this partnership, number of passengers is expected to surge 40 per cent to 1.7 million next year, the group said. “Air France-KLM and Jet are launching the first cooperation agreement of its kind on the India-European market, one of the markets at the heart of our strategy for the coming years. “Jet, AF-KLM, and Delta will thus connect India to the vast Trans-Atlantic network via the Paris-Charles de Gaulle and Amsterdam-Schiphol hubs,” Jean-Marc Janaillac, chairman and chief executive, Air France-KLM said. Air France-KLM and its partners Delta and Alitalia operate the largest Trans-Atlantic joint-venture with over 270 daily flights. Janaillac said of the over 12,00,000 customers who have flown between India and Europe through the AF-KLM-Jet networks, half of them travelled to North America, underlining the growth potential of the partnership.
For the 2017-18 winter season, AF-KLM-Jet combine will operate 64 weekly flights between the Paris-Charles de Gaulle and Amsterdam-Schiphol hubs and New Delhi, Mumbai, Bengaluru and Chennai. From Charles de Gaulle, Air France and Jet will operate 33 weekly frequencies to Bengaluru, New Delhi and Mumbai and Chennai during the same season and from Amsterdam- Schiphol, Jet and KLM will operate 31 weekly flights to New Delhi, Mumbai and Bengaluru. The two partners have also signed an MoU to further strengthen their existing cargo cooperation. The announcement of enhanced cooperation comes as Jet celebrates its silver jubilee and Air France is celebrating 70 years of its India operations.