More choices for desi globetrotter

NEW DELHI: The Indian globetrotter will now be spoilt for choice. The Jet-Etihad deal could lead to a massive hike in connectivity between India and the rest of the world through Abu Dhabi - along with the existing hub in Dubai. The additional connectivity would come through a hike in flying rights between India and Abu Dhabi, which both the airlines have sought. With both Emirates and Etihad competing to get Indian flyers, a price war is on the cards and the price-conscious traveller can have the last laugh as the Sheikhs of Abu Dhabi and Dubai fight for them.

 Apart from flyers, the Jet-Etihad deal is a win-win for both the airlines as well. Jet will have access to low cost funds of Abu Dhabi - apart from cheap jet fuel -to fund its ambitious expansion plans in both the international and domestic arenas. Etihad can now hope to increase it 2% share of international travellers flying to and from India closer to market leader Emirates' 13%.

 Etihad president and CEO James Hogan said: "The Indian market is fundamental to our business model of organic growth partnerships and equity investments... It (the deal) is expected to bring immediate revenue growth ... with our initial estimates of a contribution of several hundred million dollars for both airlines over the next five years." Jet promoter Naresh Goyal said: "It is a win-win situation for all our stakeholders, especially our guests, who will now have access to a much expanded global network."

 Indian carriers and Etihad currently have 13,000 weekly seats each. Jet had sought an enhancement of 42,000 seats per week and Etihad also wants a similar hike. On Wednesday, India and Abu Dhabi agreed on letting their airlines add almost 37,000 seats per week over the next three years. Etihad currently operates 59 flights a week to nine Indian cities, while Emirates has 185 flights a week from 10 cities and Qatar has 95 flights per week from 12 cities. Since international traffic is growing at over 10% per annum, Etihad - like Emirates - wants as much traffic from India as possible to fill up its wide-bodies flying to and from rest of the world.

 The Indian market is expected to grow to 42 million international travellers over the next five years. Now Jet, along with the foreign airlines, is armed to compete to get this traffic. Jet sources say the airline will now get low-cost funds from Abu Dhabi and expand rapidly. "Etihad places huge aircraft orders and thus gets a good price from manufacturers. Now, Jet too can get planes at the same price. And, instead of 14% interest rate for loans in India, it will get loans at 3% to 4% from Abu Dhabi," said a Jet source.

 Jet has 46 Boeing 737s on order that will be delivered over the next five years. The airline is now planning to expedite deliveries and reclaim the number one domestic airline by market share slot that it ceded to IndiGo last year.

 

Apart from these commercial reasons, a senior Jet official said Goyal wanted Jet to be an Indian MNC with presence across the globe. "Let us be India's ambassadors abroad in as many places as possible. The tricolor (that is all on Indian airlines' aircraft) should fly as far and wide as possible," Goyal is learnt to have told his team, while finalizing the airline's network. This deal means that well-run Indian carriers can also hope to have foreign airlines on board and get funding. SpiceJet and GoAir could be first off the block after Jet. IndiGo, though being chased by many foreign airlines, has not shown any interest in them for offloading stake.

http://timesofindia.indiatimes.com/business/india-business/More-choices-for-desi-globetrotter/articleshow/19716547.cms