Jet Airways, the “anti-Emirates” plan of Air France-KLM in India, collapses

Debt-stricken, the Indian company ceased operations after failing to obtain from its creditors the interim financing necessary for its operation. A blow for Air France-KLM which signed less than 18 months ago a major partnership with this company in order to regain ground between India and Europe against the companies of the Gulf, and particularly the more powerful of them, Emirates.

With the shutdown of flights yesterday from the Indian company Jet Airways indebted to the neck, the plan “anti-Emirates” Air France-KLM in India collapses. Eighteen months ago, the French group had indeed signed with the Indian carrier a large-scale partnership between India and Europe that would allow it to regain ground against Gulf companies, including Emirates, often referred to as first Indian company because of the power of its network on this part of the globe.

A deep partnership
As a reminder, this agreement made it possible to beef up an offer of so-called point-to-point direct flights between the main connecting airports of each of the three partners and to connect them to a multitude of European and Indian cities (Paris, Amsterdam, Bombay). , New Delhi, Bangalore and Chennai).

It was accompanied by the implementation of a system of sharing costs and revenues on a common flight plan, a harmonization of flight schedules, optimization of sales forces or the possibility of signing. common agreements with corporate clients. A sort of virtual fusion on this part of their network, corresponding to the highest level of commercial cooperation in air transport.

Few or no alternatives
With the shutdown of Jet Airways flights and the gloomy prospects hovering over the Indian company, all this work falls through the water. And it will be extremely complicated, if not impossible, to find an alternative. Air India being allied with Lufthansa, the solutions are not legion. British Airways has been seeing this for years. The British company has still not found a partner since the collapse of Kingfisher Airlines in 2012.

To access the Indian domestic market, the low-cost Indigo, number one today in India, could be a solution one day. Skyteam, the alliance of Air France-KLM had approached it about ten years ago when Jet Airways was leaning towards Star Alliance (the alliance of Lufthansa and United). But the failure of Jet Airways may push Air France-KLM to be cautious before reviving in a new adventure.

Jet Airways was the best choice of alliance
The irony of the story is that Jet Airways was the best choice of alliance at the time. A true success story since its creation in the early 1990s, this company, which was the first privately owned company to be launched in India, enjoyed an excellent reputation because of the quality of its fleet, its network and its Service on board. It was also courted by all the major business alliances (Star Alliance, Skyteam and Onewolrd) but also by the Abu Dhabi company, Etihad Airways, which won in 2012 less than 25% of the capital, without being able to play the slightest role in the management of the company. Long regarded as the only good catch in Etihad’s chase, Jet Airways has in fact become an investment as catastrophic as those made in Air Berlin or Alitalia.

The carrier with the yellow and blue logo, burdened by a debt of more than a billion dollars, failed to obtain from its creditors the release of interim financing necessary for its operating expenses. Its fleet, which still had nearly 120 aircraft in January, was reduced Wednesday to only five aircraft because of non-payment of leases. His employees demanded payment of salary arrears.

The strategy and management of the company pointed the finger
Beyond the increase in the oil bill, Indian observers explain the collapse of Jet Airways by the costly acquisition of Air Sahara in 2006 ($ 500 million). Unable to compete with the many low-cost airlines (IndiGo, SpiceJet and GoAir), Air Sahara subsequently named Jet Lite, suffered recurring losses. So much so that in 2015 this asset was valued at … zero in the accounts of Jet Airways. The lack of foresight of founding President Naresh Goyal in the face of the rise of low-cost is also singled out. His management of the company too.

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