The proposed Jet-Etihad Airways alliance is set to consolidate Abu Dhabi’s position as an important aviation hub.
The Naresh Goyal-owned Jet Airways planned to use the Abu Dhabi airport to launch new flights to the US, Europe, as well as a few West Asian cities such as Amman, Beirut and Baghad, airline sources said. For the new services, the airline would use fifth-freedom rights under the air service agreement between India and Abu Dhabi. These rights allow one-stop flights to pick up passengers from transit points to destinations. Though the agreement between India and Abu Dhabi, signed in 2007, offers Indian airlines fifth freedom rights, these haven’t been used yet. Next month, Jet Airways would launch a Kochi-Abu Dhabi-Kuwait flight, availing of that entitlement.
Currently, Brussels (Belgium) is Jet’s hub for its US flights. As it fine-tunes its international strategy, the airline also plans to review its plans of joining the Lufthansa-led Star Alliance.
Jet’s big push would depend on the civil aviation ministry, which would negotiate seat entitlements with Abu Dhabi next week. Currently, Indian carriers are allowed about 13,000 seats a week, under the India-Abu Dhabi agreement. Jet’s demand for 41,000 seats a week till 2016 has led to concern among the GVK and GMR groups, which run the Mumbai and Delhi airports, respectively. These groups are worried a large number of seats for the Jet-Etihad alliance would undermine their positions, as Indian carriers haven’t been able to compete against large international airlines. The negotiations would also lead to Etihad expanding its presence in India.
Jet has, however, justified its requirement. The total origin-destination traffic between India and Abu Dhabi is 1.5 million a year; that between India and UAE (which includes Dubai and Sharjah) is 6.5 million a year. “We are looking at the UAE as a whole. The differences between Dubai and Abu Dhabi are blurred, with excellent road connectivity; passengers can take flights to Abu Dhabi and be connected to other parts in the UAE by road,” said an airline source.
The Jet source said the airports at Delhi and Mumbai would continue to be part of Jet network’s strategy. “Currently, 18 per cent of all our international revenue comes from sixth-freedom (onward) traffic via Mumbai and Delhi. This includes routes such as London-Delhi-Bangkok and London-Delhi-Kathmandu,” he said, adding most of the proposed long-haul flights would originate from the airports at Delhi and Mumbai.
Currently, about 60 per cent of Jet’s revenue is accounted for by international operations; it is expected this would rise further. The airline uses a fleet of narrow-bodied Boeing 737s and wide-bodied Airbus A330s and Boeing 777s for its international routes. It plans to use wide-bodied aircraft for flights from metro cities in India to Abu Dhabi and beyond, and narrow-bodied planes for flights from smaller cities.
According to Jet’s estimates, 40 per cent of passengers on its India-Abu Dhabi flights would be accounted for by origin-destination traffic. “We believe 90 per cent of our onward traffic in Abu Dhabi would be on Jet Airways planes,” the source said. Jet has a code sharing alliance with Etihad on the Abu-Dhabi-Paris route and is looking to extend code sharing to other routes, too. This would enable access to feed traffic from its partner airline.
Etihad plans to acquire 24 per cent stake in Jet Airways. However, the deal has been stuck, owing to the Abu Dhabi government’s concern on its investment in India. Early this week, civil aviation ministry sources said they expected the deal to be concluded in a month.
Jet has asked permission to start/increase flights to Abu Dhabi from—Mumbai, Delhi, Bangalore, Chennai, Ahmedabad, Thiruvanathapuram, Hyderabad, Kozhikode, Amritsar, Mangalore, Goa, Kolkata, Lucknow, Kochi, Jaipur, Chandigarh, Varanasi, Trichy, Coimbatore and Pune.