Jet ties up with Air France-KLM on Europe routes

Jet Airways has finalised an agreement with Air France-KLM on India-Europe routes, providing a boost to its long-haul operations.

The agreement, which has been struck 20 months after Jet Airways shifted its European hub from Brussels to Amsterdam, signals its alignment with Air France-KLM and their partner airlines, Delta and Virgin Atlantic.

Jet Airways Chairman Naresh Goyal and Air France-KLM Chief Executive Officer JM Janaillac will make a formal announcement about the agreement on Wednesday.

The agreement, referred to as a joint venture, involves the airlines sharing passenger traffic revenue on the India-Amsterdam and IndiaParis routes. Cargo revenue will not be shared.

Unlike interline or codeshare agreements, a joint venture follows the principle of metal neutrality. Revenue or profit is shared on a predetermined basis on select routes and it does not matter which airline flies a passenger.

The agreement will help Jet Airways to effectively deploy its wide-body Boeing 777 aircraft and agreement with Air France-KLM is exclusive and both sides are barred from having similar arrangements with other carriers on the routes selected, a source said.

Jet Airways in October introduced flights between Bengaluru and Amsterdam and Chennai and Paris while KLM launched a thrice-weekly flight from Amsterdam to Mumbai. The airlines operate 64 weekly flights from India to Amsterdam and Paris.

A joint group of executives from the airlines will look at various aspects of co-operation. The airlines will explore closer tie-ups in sales and marketing, including common corporate and travel agency contracts.

Lufthansa, United and Air Canada, which have a transatlantic joint venture agreement, have similar common contracts and their executives conduct joint sales campaigns in India. Jet Airways and Air France-KLM did not respond to an email query on the topic.

Joint venture agreements are common among airlines —the first pact was signed between KLM and Northwest Airlines in 1997 — but this will be the first such arrangement for Jet Airways. This will also be its second deep co-operation agreement with an airline after Etihad Airways.

Etihad Airways owns 24 per cent in Jet Airways and the two airlines had entered into a commercial cooperation agreement at the time of the stake purchase in 2013.

Etihad Airways has expressed its displeasure over Jet Airways’ agreement with Air France-KLM as this will result in higher traffic flowing through European airports at the expense of Abu Dhabi.

Etihad Airways declined to comment on the topic.