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Has Jet Airways been reduced to Etihad’s feeder airline?

Written by editor

NEW DELHI, India – With Etihad Airways and Jet Airways (in which the former has 24 percent ownership), together acquiring 21 percent share of India’s international air travel market in a short span

NEW DELHI, India – With Etihad Airways and Jet Airways (in which the former has 24 percent ownership), together acquiring 21 percent share of India’s international air travel market in a short span and Jet Airways operating daily direct flights from over 15 Indian destinations to Abu Dhabi to feed traffic to Etihad’s hub, it is feared that Jet Airways has been reduced to be a feeder airline of its minority partner.

But Jet Airways’ Chairman Naresh Goyal has denied this.

“We are feeding lot of traffic to Abu Dhabi but we are not a feeder airline (of Etihad Airways). Our partnership with Etihad is a global one,” Mr. Goyal said while answering a question at the post-annual general meeting (AGM) press conference in Mumbai.

Mr. Goyal said Jet Airways had continued its efforts to build its home hubs in Mumbai and New Delhi, which have seen transfer traffic growing by 35 percent in Mumbai and by 13 percent in New Delhi.

Both airlines are now offering a combined 40,000 seats each way, each week between India and Abu Dhabi. “This has resulted in more choice and better connectivity for guests travelling out and into India from across the world,” top executives of the airlines claimed.

“Our strategic collaboration with Etihad includes network integration, joint sales, sharing of resources, collaborated procurement and knowledge transfer. All of these have enabled us to leverage cost advantages and economies of scale,” Mr. Goyal said.

“Together with Etihad, we now operate over 4,300 international flights a month, more flights to/from India than any other airline and provide our guests with an unparalleled global and domestic network, with perhaps the best and most convenient connectivity,” he added.

In terms of the combined network, Jet now has its 9W code on Etihad flights to 33 destinations across the world, while Etihad now places its EY code on 60 routes of Jet, mostly within India.

At the AGM, James Hogan, President and Chief Executive, Etihad Airways, was appointed Vice Chairman of Jet Airways indicating a larger role to be played by the Abu Dhabi based airline on Jet’s affairs.

“In the first year, the partnership had delivered significant benefits for Jet Airways, for consumers and for the Indian economy. We are now the market leader out of India,” Mr. Hogan said.

“We provided fresh capital and financial stability for Jet Airways, assisted global network growth, increased flight connectivity and delivered efficiencies through activities including joint procurement and resource sharing,” Mr. Hogan added.

In the first six months of 2015, Etihad transferred more than 2.35 lakh passengers onto Jet’s network into India through its code share partnership, with Jet providing 1.82 lakh passengers onto the Etihad network, officials said.

Mr. Goyal said the benefits of Jet’s alliance with Etihad would continue to emerge in the coming years.

“We will continue to work towards building a stronger base for the future by taking decisions that are in the long-term interest of all our shareholders,” he said.

Mr. Hogan said Etihad’s partnership strategy had provided value to Jet in excess of $2.5 billion and is delivering lower operating costs and greater efficiency for the two airlines and ‘contributing strongly to the Indian economy’.

“In just over one year, our partnership has made significant progress but there are still many challenges to tackle, but also exciting opportunities ahead,” he said.