Jet Airways to benefit from new Abu Dhabi links to India
Jet Airways is expected to receive a boost from its newly introduced daily flights from Abu Dhabi to Goa and Lucknow in India.
The routes, introduced a month ago, are aimed at attracting tourists to the popular western city of Goa, and labourers to travel through Lucknow in the north, according to analysts.
Etihad Airways, which owns a 24 per cent stake in Jet, is also expected to benefit from the arrangement by bringing tourists from Europe, North America and the Middle East via its Abu Dhabi hub and flying them to Goa.
“This is a very good move for Etihad and Jet, as the peak season in Goa starts in November [and lasts] until February,” said Praveen Sahay, a senior research analyst at India-based Batlivala and Karani Securities.
For Lucknow, labourers working in the Gulf would usually commute to larger cities such as New Delhi to fly to Abu Dhabi. By connecting the two cities, Jet will also benefit from cheaper fuel and airport charges at Lucknow airport, said Mr Sahay.
Etihad’s partnership with Jet includes three pairs of arrival and departure slots at Heathrow Airport through a sale and leaseback agreement.
Etihad paid US$150 million for Jet’s frequent flyer programme.
But the financials of the Indian carrier plunged last year, leading Etihad to pledge to turn its Indian partner into profitability by 2017.
For the quarter ended September, Jet made a profit of 698m rupees (Dh40.9m), primarily on the back of a one-off payment from the sale of its loyalty programme. Jet reported a loss of 8.91 billion rupees in the same period a year earlier.
“The second-quarter results were the best for Jet after a series of bad quarters,” said Mr Sahay.
“Etihad helped Jet to achieve an aircraft occupancy of 85 per cent, which is very healthy.”
Mr Sahay added that Jet is benefiting from other advantages thanks to its tie-up with Etihad, including cheaper maintenance at Abu Dhabi airport.
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Published: December 14, 2014 04:00 AM