Air France–KLM and Jet Airways will coordinate more closely on operations between Europe and India. The companies announced an Enhanced Cooperation Agreement today at a signing ceremony in Mumbai. The deal sees Jet Airways, Air France, and KLM working together to develop their commercial and product offering. Customers will see this cooperation and coordination throughout the three partners’ networks spanning 44 cities in India and 106 destinations across Europe.
The closer alignment of Jet Airways to the AF/KL Group started in 2014 and took a significant step forward in 2016 with the shift of Jet’s European hub from Brussels to Amsterdam. The airlines introduced significant codeshare operations as part of that growth. More recently KLM launched service to Mumbai while Jet Airways added two new routes, Bengaluru-Amsterdam and Chennai-Paris. This joint venture agreement will see further adjustments of routes and flight schedules to facilitate onward connections. Additional reciprocity between the loyalty programs is also expected.
Another Etihad Setback
Etihad owns just under 25% of Jet Airways, a significant minority stake. That investment came about during the Abu Dhabi-based carrier’s spending spree to create an increased flow of travelers through its hub. The effort proved to be disastrous financially, with Alitalia and Air Berlin collapses costing Etihad billions. This latest venture is more a mixed bag for the Etihad position.
The joint marketing and schedule coordination with significantly more destinations and connection options presents an opportunity for a financially successful venture, far more than the Jet-Etihad link over Abu Dhabi exposed. That’s good news on the financial side for the investment. Alas, the deal is bad news on the strategic side in in terms of building the Abu Dhabi hub and the Etihad Group alliance.
The announcement also includes mention of the transatlantic join venture with Delta Air Lines (and Alitalia and likely soon Virgin Atlantic). Just what that relationship involves is unclear at this point.
We are innovating within the airline industry by offering connections between two partnerships for the first time: our enhanced cooperation agreement for India – Europe with Jet Airways and the Air France-KLM and Delta Air Lines’ Europe – North American joint venture. Jet Airways, Air France, KLM, and, Delta Air Lines will thus connect India to a vast transatlantic network via the Paris-Charles de Gaulle and Amsterdam-Schiphol hubs. – Jean-Marc Janaillac, Chairman and CEO of Air France-KLM
Janaillac also notes that some 600,000 passengers annually are traveling on the combined AF/KL-Jet network into Europe and then onward to North America. This arrangement is part of “confirming our ambition to offer customers an enhanced network, and a unique, seamless product.” But the JV does not appear to extend across the Atlantic yet.
By connecting our network with @jetairways & @delta, we will be able to offer a seamless travel experience to millions of customers between 3 continents 🇺🇸✈️🇳🇱🇫🇷✈️🇮🇳 https://t.co/uqPRqYAF9w #JetAirwaysWithAirFranceKLM pic.twitter.com/Ntc8KpcCe1
— Air France-KLM Group (@AirFranceKLM) November 29, 2017
Gaining approval for a JV that extends to India including Jet Airways would be a significant coup for the airlines. Flights between Amsterdam and India were previously included. Expanding beyond that may require adjustments to bilateral treaties, particularly between France and India. As of 2005 the two countries did not enjoy an open skies relationship.
Good or Bad for Passengers?
As with all joint venture arrangements there are pros and cons for the consumer. Coordinated scheduling and improved connection options typically leads to shorter overall trips and the spread of new nonstop routes in this deal is particularly attractive. The negative comes from reduced competition and a likely increase in fares as a result.
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