The Jet Airways Meltdown Could Spell Trouble for Delta’s India Plans

Jet Airways had been largely controlled by minority shareholder Etihad for some time. Jet Airways JetPrivilege was even spun off as a separate business entity so that Etihad could exercise more control over the combined entity without running afoul of foreign ownership rules.

However Jet has been running increasingly independent of Etihad as the Abu Dhabi-based carrier has pulled back from its international investments — even allowing air berlin to go out of business and walking away from Alitalia as it continues on life support with government subsidies (benefiting transatlantic joint venture partner Delta).

Gateway of India, Mumbai

Jet Airways though is now in shambles, struggling to pay bills, they’ve even failed to pay salary to their pilots who are calling in sick and cancelling flights. The airline has received a bit of a cash infusion by 24% owner Etihad, and has shopped the half of its frequent flyer program it still owns to private equity in an attempt to raise funds.

Now it appears that Etihad may pump in more money and take operational control of Jet Airways.

Delta claimed 6 months ago that they’d fly to India on non-specified routes starting at a non-specified time.

They claimed it had become possible because of what Emirates, Etihad, and Qatar gave up (nothing) in trade negotiations with Tariff Man. In truth a closer relationship with Jet Airways meant they’d have Indian domestic connecting traffic for their flight, which would presumably be served by an Airbus A350 which is more fuel efficient than the Boeing 777-200LR they used to fly Atlanta-Mumbai.

Copyright: boarding1now / 123RF Stock Photo

Over the summer American Airlines CEO Doug Parker said they could announce India service by offering as little commitment as Delta had made.

[American Airlines Vice President of Planning Vasu Raja said],

“For as much press as was made on flying to India there still hasn’t been an announcement about anybody starting new service from the US to India either, and I imagine high fuel prices are probably a headwind for that as well. Who knows.”

[American CEO] Doug Parker asks, “So they said they’re gonna fly to India but they haven’t loaded a flight?”

Raja points out that not only haven’t they loaded a flight into the schedule, they haven’t even announced what the flight will be. Parker then declares, “well you can do that!”

And so Raja announces “At some point we’re going to fly to India too.”

It will be interesting to see whether a disrupted relationship with Jet Airways — from the carrier’s own troubles, and the possibility that Etihad takes back control — could stymie Delta’s indeterminate and underspecified promise to serve the market.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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