Mumbai, May 20 -- Jet Airways (India) Ltd, India's second largest airline by passengers carried, is exploring plans to open at least two additional international hubs besides Abu Dhabi, following Etihad Airways PJSC's decision to acquire a 24% stake in the former for $379 million. It is looking at Amsterdam, Berlin and Paris for this purpose, according to two people close to the development. Jet Airways currently uses Delhi and Mumbai as local hubs and Brussels as an international hub. Two more international hubs will help Jet Airways offer its passengers more choices and competitive fares.
India allowed foreign airlines to invest in local ones in September, setting the stage for Jet Airways to sell a 24% stake to Etihad. Jet Airways plans to move at least one-third of its international operations through Abu Dhabi after it concluded the transaction with Etihad. In fact, it has already started connecting Kuwait from Kochi via Abu Dhabi.
"It makes sense for Jet Airways to open more international hubs, considering Eithad Airways has got a wide network and equity investments in other airlines. Jet Airways will not be closing the current hub in Brussels, though it may scale down a bit," said one of the people cited earlier. He added that through Etihad Airways and its associate airlines, Jet Airways can offer fliers more options with one stop at any of these hubs. Eithad Airways owns stock in Air Seychelles, Virgin Australia, Aer Lingus and Air Berlin.
According to aviation experts, Etihad Airways along with its network carriers where it has equity investments can emerge as a fourth global airline grouping, posing competition to many established airlines in Europe and West Asia. For passengers, connectivity is going to be enhanced even from tier-II and tier-III cities at competitive rates once competition intensify, according to the experts. Currently, there are three alliances-OneWorld (led by British Airways), Skyteam (Air France-KLM) and Star Alliance (Lufthansa).
Craig Jenks, president at New York-based consultancy firm Airline/Aircraft Projects Inc., said Etihad Airways and other airlines, including Jet Airways, can emerge as a fourth alliance to some extent, but at the same time Etihad Airways is also doing many tactical deals with alliance members such as Air Canada, South African Airways and Air France, among others. He said that Jet Airways hub strategy is wide open. "Stay at Brussels; build at Abu Dhabi; combine forces with Etihad Airways and Air Berlin at Dusseldorf International Airport. The same can be done at Berlin, if they ever open the new airport, though Dusseldorf is much better," Jenks said. Jet Airways executives declined to comment.
Etihad Airways, which began operations in 2003, serves 86 cities in West Asia, Africa, Australia, Asia, Europe and North America, with a fleet of 70 Airbus and Boeing aircraft. It has at least 90 aircraft on firm order, including 10 Airbus A380s, the world's largest passenger aircraft. Jet Airways currently operates a fleet of 100 aircraft and flies to 73 destinations in India and at least 20 overseas.
Jet Airways' aggressive network strategy has put other carriers on alert. According to a senior civil aviation ministry official, national flag airline Air India Ltd will restart its efforts to join Star Alliance. In 2011, Star Alliance snubbed Air India, citing certain shortcomings in the qualifying parameters for joining the alliance. Last week, a section of the media in West Asia reported that Doha-based Qatar Airways is keen to explore a possible alliance with India's largest airline by passenger carried, IndiGo, citing Akbar al Baker, chief executive officer of the West Asian airline, at the sidelines of a travel show in Dubai. Another low-fare carrier GoAir has appointed JPMorgan Chase and Co. as investment banker to find a possible suitors among foreign airlines. Published by HT Syndication with permission from MINT. For any query with respect to this article or any other content requirement, please contact Editor at [email protected]
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