‘Air France-KLM Close to Forming JV with Jet Air’
Deal may entail synergies on routes and other areas, says Dutch carrier’s CEO
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