The $379 million investment will give Etihad 24 percent of Jet Airways’ shares. Etihad will invest $220 million to create and strengthen a wide-ranging partnership between the two carriers. Etihad Airways paid $70 million to purchase Jet Airways’ three pairs of Heathrow slots through the sale and lease back agreement announced on Feb. 27. Jet Airways continues to operate flights to London utilizing these slots. Etihad will invest $150 million by way of a majority equity investment in Jet Airways’ frequent flyer program “Jet Privilege,” subject to regulatory and corporate approvals and final commercial agreements that are expected to be completed within the next six months.
Under the strategic partnership, which will be subject to full regulatory and shareholder approval, the airlines will gradually expand existing operations and introduce new routes between India and Abu Dhabi. They will combine their network of 140 destinations, with Jet Airways establishing a Gulf gateway in Abu Dhabi and expanding its reach through Etihad Airways global network.
Passengers from 23 cities in India will benefit from direct connections to international destinations. New flights from Jet Airways’ home hubs and metro airports will further strengthen its current operations from these airports. Jet Airways’ vision continues to be to develop Delhi and Mumbai airports as its primary home hubs, connecting them to Asian, European and other regions.
Current estimates predict the size of the Indian market to grow to 42 million travelers over the next five years at a rate of 10 percent per year, while the Indian middle class that provides the majority of air travel demand, is forecast to grow by 200 million, over the next eight years.
Etihad Airways currently flies to nine Indian destinations including Delhi, Chennai, Mumbai, Kozhikode, Thiruvananthapuram, Hyderabad, Bangalore, Ahmedabad and Kochi, with a total of 59 flights per week. The partnership will also help drive a significant increase in traffic growth through Abu Dhabi International Airport, as well as Jet Airways’ hubs of Mumbai and Delhi international airports.
The airlines will explore joint purchasing opportunities for fuel, spare parts, equipment and catering supplies, as well as external services such as insurance and technology support.
Other areas of co-operation will include joint training of pilots, cabin crew and engineers, as well as maintenance of common aircraft types and the consolidation of guest loyalty programs.
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