‘Air France-KLM Close to Form­ing JV with Jet Air’

Deal may en­tail syn­er­gies on routes and other ar­eas, says Dutch car­rier’s CEO

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Anirban Chowd­hury Mum­bai: The Air FranceKLM com­bine is close to form­ing a far reach­ing, deep com­mer­cial joint ven­ture with Jet Air­ways which will likely en­tail syn­er­gies on more routes, their re­spec­tive fre­quent flyer pro­grammes, “me­tal neu­tral­ity” as well as cargo and engi­neer­ing, the chief ex­ec­u­tive of the Dutch car­rier said Mon­day in an in­ter­view to ET.

The JV will likely also have US car­rier Delta Air Lines and Vir­gin At­lantic.

This is the first time when Pi­eter El­bers, the chief of KLM Royal Dutch Air­lines, has in spe­cific terms men­tioned the joint ven­ture and how close the air­lines are to form­ing it.

El­bers also con­firmed “me­tal neu­tral­ity” is be­ing looked at. It’s a con­cept un­der which the air­line part­ners be­come ag­nos­tic to whose air­craft or “me­tal” car­ries the pas­sen­ger. US laws also re­late it to the term “vir­tual merger” un­der which the part­ners work as closely as pos­si­ble with­out ac­tu­ally merg­ing on a strate­gic or bal­ance sheet level.

El­bers re­frained from giv­ing a time­line, but men­tioned the above-men­tioned con­tours that will likely be part of the agree­ment.

The JV would likely give Jet un­prece­dented reach into the west­ern airspace with­out nec­es­sary hav­ing to de­ploy its own planes. Mean­while, the air­line is firm­ing up plans to or­der about 100 Boe­ing 737 Max planes to deepen its reach within In­dia’s do­mes­tic air routes.

ET had first re­ported the JV on Septem­ber 27, last year. On May 8, cit­ing El­bers, ET re­ported these air­lines’ plans to strengthen their ties. At the time, he spoke about tie-ups in engi­neer­ing and main­te­nance.

In Septem­ber end, Air France CEO Franck Terner spoke to news agency Reuters of deeper ties planned with Jet. Jet hasn't com­mented on the de­vel­op­ments yet. A se­nior ex­ec­u­tive at the air­line Mon­day re­it­er­ated its stand of a no-com­ment.

Jet Air­ways al­ready has code share part­ner­ships with both air­lines as well as Delta and Vir­gin. The part­ner­ships en­able Jet pas­sen­gers ac­cess to 34 US and 43 Euro­pean des­ti­na­tions via its Euro­pean hub, Amsterdam, and 27 via Paris.

Pas­sen­gers trav­el­ling from Europe or North Amer­ica can gain air con­nec­tiv­ity to 45 In­dian cities on Jet’s do­mes­tic net­work via Ben­galuru, Chennai, Delhi and Mum­bai.

Ear­lier this year, Jet an­nounced ex­pan­sion of its code­share part­ner­ships with Delta as well as Air France and KLM, by in­clud­ing more cities.

On Mon­day, El­bers con­firmed there have been re­cent, fruit­ful talks of ty­ing up on the cargo front as well. Air France-KLM and Delta are part of a trans-at­lantic joint ven­ture which, among other tie-ups, also en­tails the Euro­pean car­rier com­bine be­ing re­spon­si­ble for Delta's cargo sales ac­tiv­i­ties in France and Germany.

Pi­eter El­bers ET AR­CHIVE

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