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Corporate Apr 25, 2013

Jet-Etihad deal: 4-fold jump in India-Abu Dhabi seats & other sweeteners

By Sindhu Bhattacharya

New Delhi: Ignoring unprecedented political opposition and fears of other domestic carriers such as Air India, India is believed to have agreed to enhance seat entitlements to and from Abu Dhabi multiple times.

According to sources, the present weekly entitlement (which means how many seats designated carriers of each airline can offer) of 13,300 remains. In addition, the two governments have agreed to allow another 11,000 seats a week by December this year. Then, in 2014 the entitlements get increased by another 12,800 seats a week and in 2015, by another 12,870 seats a week.

Reuters

Reuters

So, by the end of 2015, Indian airlines would be able to offer 49,870 seats a week, which means an almost four fold jump.

Not all seats would, normally, go to Jet and some amount of the increase in seat entitlements would also perhaps benefit other Indian carriers.

Besides a quantum jump in seats, the two countries have also reached an agreement on allowing Jet Airways to change gauge, which means it can change aircraft at Abu Dhabi if needed. This is a key requirement of Jet Airways' overall network plan where it would make Abu Dhabi its global hub and offer onward connections to western countries by carrying passengers from smaller towns and cities in India, to Abu Dhabi first.

The talks have also agreed for domestic and third country code share for carriers on both sides. This means passengers on either airline are expected to derive benefits from reciprocal 'earn-and-burn' rights on the airlines' frequent flyer programs.

Besides, as Jet said in a statement, the proposed codeshare expansion will significantly enable Etihad Airways to tap into India's rapidly growing travel market, providing additional passenger traffic to Etihad Airways' Middle Eastern, North American and European destinations, and give Jet Airways' passengers from various cities access to an expanded network.

That the deal will give a major fillip to Jet by allowing it access to Etihad's global network is clear now. The Indian carrier has quietly been restructuring its international network to make Abu Dhabi, Etihad's headquarters, the center of its global operations.

Jet Airways now operates several flights from six Indian cities to Abu Dhabi, either directly or via a codeshare agreement with Etihad. It has sought government approval to connect 23 more Indian cities to Abu Dhabi.

In return, Etihad will be able to tap into India's growing community of international flyers who travel to the Middle East, North America and Europe.

In February, Etihad agreed to buy Jet's three pairs of landing and departure slots at London's Heathrow airport for $70 million. Jet will continue to use these slots on lease.

by Sindhu Bhattacharya

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