The FINANCIAL -- The strategic investment of Etihad Airways into Jet Airways is delivering strong results for both airlines across areas including network growth, revenue enhancement and operational and cost improvements, senior executives from the airlines said on August 16.
Jet Airways and Etihad Airways now the number one operators out of India
Collaboration has grown strongly, bringing greater passenger number significant expansion of networks, flight connections increase access to and from India
Synergies across the business significantly helping Jet Airways’ turnaround efforts
Speaking at a media conference in Mumbai, Naresh Goyal, Jet Airways’ Chairman; James Hogan, Etihad Airways’ President and Chief Executive; and Cramer Ball, Jet Airways’ Chief Executive also gave other details of the significantly improved results for the Indian carrier.
The two airlines together now offer more flights to and from India than any other airline, with a 21 per cent share of the country’s booming international air travel market.
Since Etihad Airways’ 24 per cent investment in Jet Airways was finalised in November 2013, the two airlines have increased from nine to 15 the number of direct routes between India and Abu Dhabi, introduced wide-bodied aircraft on key routes, and increased to multiple daily flights in some markets.
Addressing the media Mr Goyal, Mr Hogan and Mr Ball said that the airlines now offer a combined total of 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.
Naresh Goyal said: “Our strategic collaboration with Etihad Airways includes network integration, joint sales effort, sharing of resources, collaborated procurement and knowledge transfer. All of these have enabled us to leverage cost advantages and economies of scale to the eventual benefit of our guests, as well as our employees.”
“Together with Etihad Airways, 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.”
In terms of the combined network, Jet Airways now has its 9W code on Etihad Airways flights to 33 destinations across the world, while Etihad Airways now places its EY code on 60 Jet Airways routes, mostly within India, according to Etihad Airways.
The airlines have also aligned their schedules between Abu Dhabi and India to improve flight connectivity between their networks, substantially increasing choice for passengers on both airlines.
James Hogan said: “Before our equity deal with Jet Airways, we had two per cent of the international traffic out of India. Today, with Jet Airways, we have 21 per cent of the market, and combined, we are the dominant carriers out of India.
“Jet Airways is now our number one equity partner for revenue and passenger contribution on Etihad Airways. India is now Abu Dhabi’s number one source market for international visitors.”
He added that the first year of the partnership had delivered significant benefits for Jet Airways, for consumers, and for the Indian economy.
“Jet Airways is a perfect partner for us. It is a strong, recognisable brand in India, has an established network and infrastructure, a skilled workforce and a large customer base.
“Etihad Airways is an active investor and a strategic partner. 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.”
In the first six months of 2015 Etihad Airways transferred more than 235,000 guests onto Jet Airways’ network into India through its codeshare partnership, with Jet Airways providing 182,000 guests onto the Etihad Airways network.
The improved Jet Airways performance followed a number of other key strategic moves that had been taken, including the airline’s return to being a single brand with a full service offering, the standardization of its Boeing 737-800 fleet and a refreshing and reconfiguring of cabins on its Airbus A330 and Boeing 777 aircraft.
Cramer Ball said that Jet Airways’ return to single brand full service product strategy has been successful: “In an increasingly competitive environment we are adding value through our consistent full service product supported by the ‘Guest First’ service philosophy.”
“Our overall value proposition that includes complimentary lounge access at airports for frequent fliers, quality inflight catering across all flights and an award winning loyalty programme is receiving very positive acceptance in the market,” he added.
Further benefits accrued to Jet Airways through membership of Etihad Airways Partners, a new coalition of like-minded airlines, working together to align their networks, schedules, and loyalty rewards programs, and seeking opportunities to cooperate on activities which reduce costs and increase revenues.
Other members of Etihad Airways Partners are Etihad Airways, Alitalia, airberlin, NIKI, Air Serbia, Air Seychelles and Etihad Regional.
Mr. Goyal said: “The benefits of our alliance with Etihad Airways will continue to emerge, highlighting the significance of this strategic relationship. 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.”
Mr. Hogan concluded: “Our partnership strategy has provided value to Jet Airways in excess of USD2.5 billion and is delivering lower operating costs and greater efficiency for our two airlines, and contributing strongly to the Indian economy.
“Most importantly we are delivering more choice to consumers flying to, from and within India,” he said. “In just over one year, our partnership has made significant progress - but there are still many challenges to tackle, but also exciting opportunities ahead.”