From Abu Dhabi to the world – with feed from India

From Abu Dhabi to the world – with feed from India

Analyzing Etihad’s long haul network to United States of America and changes to Abu Dhabi feeders

I have traditionally been a student of domestic network in India trying to remember the history, rotation and traffic patterns for an airport or an airline. Time and again, I rely on some of my friends to understand the international connections and networks. This time around, I decided to team up with Rishul – a student of engineering and a keen follower of Jet Airways network to attempt writing about what the change in Etihad’s USA bank means to the Indian customer. 

Etihad flagged off its 2^nd Daily non-stop flight to New York’s John F. Kennedy airport (JFK) on 1^st March 2014, where competitor Emirates already operates double daily and direct from neighboring Dubai in addition to one via Milan. Emirates will also add another frequency from March 2015.

However, this is the first of many flights as Etihad starts an aggressive expansion in North America. The airline would start 3 new destinations in the United States within a span of 8 months backed by a strong demand from India which is being fed into Abu Dhabi by its equity partner Jet Airways.

Traditionally network carriers – which work on a hub and spoke model, schedule flights to a region at a particular time. Example – all flights from Europe to India would typically leave around mid-day to reach at night in India and depart so as to reach early morning in Europe. Departures to USA would be at similar time to ensure connectivity from east to west. This departure of flights is known as a bank of departures.

Cost of opportunity

As they say, cost of opportunity cannot be ascertained and when Etihad decided to go ahead and buy a 24% stake in Jet Airways and purchase the Jet Privilege Frequent Flier Program, it also came with an exponential increase in seat allotment from India to Abu Dhabi allowing new frequencies and destinations. While most of the tier II connections will be flown by Jet Airways, the major metro would see expansion from Etihad too.

Etihad Airways had clearly maintained the importance of a strong feed from India and how dipping deep into the Indian market was to play a pivotal role in their planned growth.  With the launch of their flights to Abu Dhabi from Chennai and Kochi, continuing on to Dammam and Kuwait, in the 2nd week of January, Jet-Etihad had given a very clear indication of the hub in Abu Dhabi they were working towards, which was re-enforced by the addition of the Hyderabad and Bengaluru to Abu Dhabi flights from 1^st of March.

The hub was structured around the 2nd daily to New-York JFK, operated by a Jet Airways B777 aircraft, leaving Abu Dhabi at 0145 hours Local Time (LT), and returning at 0920 LT the next day, thus adding another bank of departures to the United States, later in 2014 EY added late afternoon departures to 6 India destinations, returning back to AUH by midnight, thus providing an Etihad operated connection to the JFK, newly launched SFO and other European flights.

Jet Airways was supposed to operate this flight but for the downgrade in status of Indian aviation by Federal Aviation Authority (FAA) which now bars any airline in India to add flights to United States. Etihad went on to add flights to Dallas Fort-Worth and Los Angeles using the 77Ls they had acquired from Air India. 

USA OVERHAUL

Coinciding with the enhanced availability of the US Preclearance, 9W-EY announced a major overhaul of schedules to their India - AUH - North American flight structure, w.e.f  29th March 2015. While in actual addition were just 21 weekly flights from Ahmedabad, Mangalore and Pune, along with additional wide body services from Etihad, there was a major shift in timings of Etihad's North-American Departures.

While Emirates has a mixed departure bank to USA, Etihad is trying to get maximum early morning arrivals into USA and could see further time changes in the next season as the India feed stabilizes.

• To Toronto and Chicago from Abu Dhabi – which now leave late night from Abu Dhabi reaching early morning at destination.
• Delaying the departure from New York to popular late afternoon 1530 hours, along with re-timing San Francisco departure so ensure that the arrival bank is stronger than ever.

Etihad now has two very prominent USA departure / arrival banks

• Red eye departures to New York, San Francisco, Toronto, Chicago; returning back between 1200 – 1300 hours LT.
• Mid-morning departures to Los Angeles, New York, Dallas; returning back during late evening hours.

This is far cry from Emirates bank to New York, Seattle, Houston, Boston, Los Angeles and San Francisco – which leaves mid-morning and returns late evening and flights to Dallas and Washington along with the second frequency to New York which leaves post-midnight returning in the afternoon.

Qatar Airways flies to seven destinations in the United States – all in one bank of mid-morning departures, barring Philadelphia which departs post mid night and does not connect to any Indian destination within an acceptable connection time. With just one bank of flights to India, the options are limited but connections are perfect.

Etihad would look at two banks of arrivals at Abu Dhabi from India

• First between 2200 and 0100 which sees arrival from ten destinations and another between 0600 and 0800 from another 10 destinations
• A mini Jet Airways hub at Abu Dhabi with flights from Hyderabad and Chennai going onwards to Dammam and Kuwait City.
• One Mega departure bank between 2100 and 2300 with departures to 13 destinations
• Connection from a total of 23 cities in India to Abu Dhabi and many more in second phase

Combined 9W-EY India Operations

Etihad with equity partner Jet Airways would operate 217 weekly flights to India effective 29^th March 2015 as compared to 95 of Qatar and 188 of Emirates. While Emirates operates all wide body aircraft, Etihad – Jet Airways would operate the narrow body B737s for all of their flights to Tier-II cities.

Image Source: gcmap.com

ANALYSIS

With the new timings and addition of another bank of departure, Etihad – Jet Airways combine would connect Indian cities to New York, Chicago, San Francisco, Toronto, Dallas, Los Angeles, Washington in a seamless sub 3 hour connection, which is most preferred with travelers.

What would add up to this is the pre-clearance facility at Abu Dhabi which means that you land in USA as a domestic passenger having done your immigration during transit at Abu Dhabi.

Cities like Mangalore, Goa, Lucknow and Pune which see limited competition have longish connection times for few cities. Passengers from these cities tend to look for flying out of their own city rather than change flights at one of the hubs in India and then again in Middle east or Europe.

With fast expanding network of Etihad not just to United States but also to Europe and Etihad investing in Alitalia and Etihad Regional in Europe – passengers from tier – II cities in India are an attractive lot who can now transit at Abu Dhabi and reach their destination one stop.

While this change means a lot for feeder traffic, it also has positive implications for traffic originating in United States with New York, San Francisco and Chicago getting early morning arrivals. The differentiator here would be pre-clearance, however this will continue to be a tough market for Etihad with Emirates mounting flight after flight and upgrading flights to A380.

This change gives a big boost to Jet Airways aircraft utilization – from parking the planes overnight at Abu Dhabi, they will not have a full rotation. The existing utilization which has already crosses 11.7 hours, could well cross 12 hours post this change.

The bonding between Jet Airways & Etihad will only increase from here on as the inter dependency increases, with the entire bank to Unites states dependent primarily on feed from India for Etihad and the Abu Dhabi shuttles of Jet Airways dependent on Etihad to be filled up.

A little over a year after the deal went through 15 of 23 destinations are already connected to Abu Dhabi. As people say, India - USA market is so dynamic and diverse, that an airline doesn't have to target growth, it has to merely position itself in the most comfortable way to get the best out of it. So, as Emirates darts A380s to the US with an tremendous network feed, QR fully integrates itself into the One World structure,  Air India with incredible India penetration this is the path Etihad has chosen to grow on this sector.

Hard Product

The San Francisco and (2nd daily) New York flights are operated by Jet Airways configured 77Ws, consistency of hard product becomes a problem, business travelers and frequent flyers have always shown an inclination towards familiarity, and while the Jet Airways’ 77Ws have a fairly good hard product, the 737s, can't match up to EY's A320s, all of which on the whole creates a negative impact on frequent fliers. Even though, Etihad and partners are moving towards a single hard product, it is still some distance away as of now. 

Tail Note

Etihad would find it easy to fill up flights from Tier – II destinations to Abu Dhabi and onwards to Europe and USA as compared to Mumbai or Delhi. The two leading metros have direct connectivity to USA with Air India and United. With Abu Dhabi – USA being a 15 hour non stop flight, the comparable flight from Mumbai or Delhi drops you in Newark or Chicago. The odds of flying these are more if the final destination is not on the network map of Etihad. Etihad will have to grow rapidly in the United States in the next one year.

The airline has been struggling to get hold of the Indian market, even when it is growing leaps and bounds. The next focus, we believe would be on improving the hard product, standardizing it and focusing on marketing and sales efforts. 

There would be more in store from the partnership when India is upgraded to Category – I status by FAA, when the airline may launch a India – Abu Dhabi – Chicago by its own B777s either from Mumbai or Delhi and take a decision on its limited operational hub at Brussels.

  

Leading the pack yet again - IndiGo now corners 36.4% market share

Summarizing 2014

2014 was a year of mixed emotions for Indian Aviation. The industry returned to growth after a brief hiatus post the fall of Kingfisher Airlines and in the latter half of the year saw reduction in prices of Aviation Turbine Fuel (ATF) on global cues.

With this came the unprecedented but widely forecasted crisis at Spicejet, after few steady months. The year which started on a good note for Spicejet, having performed better than IndiGo in its much touted On Time Performance (OTP) ended with one of the worst performances on the same parameter for the airline, recording a low of 47% on time departures at Delhi in December’14.

Go Air, launched a new station – Bhubaneshwar and deferred delivery of its 20^th aircraft, Air Asia had muted performance with expansion nowhere close to what was being discussed and published.

Jet Airways was resurgent with funding from Abu Dhabi’s Etihad and subsequent changes, while only other Full Service carrier Air India had its own share of problems with the technical glitches on the Dreamliner’s and engineering issues on the Narrow bodies yet made it to Star Alliance.

Well, that leaves us with IndiGo – which continued to expand with more flights between metros and launching flights to few more domestic and international destinations. The airline also, for the first time decided to induct aircraft available in open market as a stop gap arrangement till the A320 NEO are inducted.

IndiGo continued to be a market leader, closing the year with a market share of 31.8% followed by Jet Airways and its subsidiary Jetlite at 21.7%. National carrier Air India garnered 18.4% while Spicejet cornered 17.4%. Go Air failed to breach the double digit mark and ended the year at 9.2% with Air Costa and Air Asia closing at insignificant 0.9% and 0.5% respectively.

2015 begins

Passengers grew 21.33% MoM in January 2015, an indication of return of good times and assertion that growth in capacity is followed by growth in passenger numbers.

The year started with news of change in ownership at Spicejet and launch of Vistara. Both will have an impact on the market in these 12 months of 2015. However, at the end of January, Spicejet was still struggling to get its act in order with an On Time Performance (OTP) of just 34% at Delhi in January. Indeed most of it was affected by fog, but it wasn’t fog alone which led to this performance.

The OTP remained an issue for all airports across the country due to the fog in North & East India which was around for a prolonged period than yesteryears. Normally unaffected stations also saw fog this year which compounded the problem.

January 2015 saw a total of 62.45 lakh passengers taking to the skies, with the month clocking marginally lower Load Factors than December 2014.

Jet Airways clocked the maximum load factors of 87.4 percent for flights operated under Jetlite code (S2) and 87 percent for those operated under Jet Airways (9W), while the lowest load factors were clocked by new comer Vistara which recorded 45.4 percent. Vistara did not have complete month of operations and this was its first month, thus this is too early to judge the performance.

Spicejet saw maximum cancellations and also maximum complaints – a trend that should reverse very soon as funding is tied up and operations are back to normal.

IndiGo continued to outperform competition in market share as well as On Time Performance with overall On Time Performance of 73.3% and a market share of 36.4%. Spicejet had the worst On Time Performance with less than 50% of its flights being on time. This is largely due to its performance at Delhi being hit to a low of 34%.

Go Air has seen its market share slip from over 10% which it achieved twice last year to less than 9% now. With no addition to capacity, the airline will find it tough to hold on to the market share. However, the airline continues to have some monopoly or duopoly routes which the competition is not after. This is either due to slot constraints at Mumbai or the leaders fighting it out with the newbies in the market.

Challenges Ahead

2015 will be a challenging year, Vistara would be flush with funds to expand and Air Asia would be hoping to get back on track with newer routes, planes and a massive expansion if they have to sustain. So far it looks like IndiGo has been able to contain them and made them re-think on the plans they had. Jet Airways will continue its expansion to its middle eastern hub of Abu Dhabi with flights from Ahmedabad and Pune on agenda effective March. This year will also give us an answer on the European hub strategy of Jet Airways.  Spicejet will get its strategy in place with respect to Q400 and B737 and will have another “NEW” network this year.

If all goes well, by year end IndiGo may receive the all new A320 NEO. Spicejet would hope to stabilize the network and operations in first half of the year and take a decision on the Q400s by mid-year. Go Air could well be the next airline to start international operations, most likely a short hop from Mumbai or Delhi.

Lastly, the government will have to get its house in order and iron out differences on the revised Route Dispersal Guidelines and revise the 5/20 rule at the earliest. The battle for Noida airport will increase from here on and so would this be a critical year for Navi Mumbai. Any delay now, will mean the airport opening certainly gets pushed post next general elections

I can only hope for a great 2015 for Indian Aviation !

Signs of Positive changes - Jet Airways from Pune to Bengaluru

I decided to jump jobs in Jan, which meant I was relatively free till I join the new assignment and take a day off to visit Aero India. I firmed up on Feb 20^th and 21^st as the days I would be at Yelahanka and proceeded with bookings.

Bengaluru from Pune opens up unlimited options across the day, with frequencies led by IndiGo – 5, Jet Airways & Go Air – 2 each, Spicejet & Air Asia – 1 each. To reach well in time and make it to Aero India – I decided to take up the first departure from Pune, the 0545 Jet Airways flight. This would also be my first after the airline moved to an all FSC model. The old flight number 9W 2363 is retained, which once indicated the LCC wing of the airline.

This is one the older flights of Jet Airways and for a brief period in 2009 operated by ATR. This rotation operates as PUNE – BENGALURU – KOLKATA – GUWAHATI – JORHAT / IMPHAL – GUWAHATI – KOLKATA – BENGALURU – PUNE.

Booking

I decided to download the Jet Airways mobile app to process my booking. The experience was new and good. Just that the app closed immediately after the PNR was generated. I received the tickets in my mailbox in 10 minutes.

About 23 hours to departure, I logged in and did a check in from the app, which again was effortless.

Check-in, Boarding & Airport Experience

I reached the airport at 0425, about 1:20 mins to departure and the standard two CISF checks at Pune led me to the check-in area. I only had a hand baggage and thus made my way to security. Within 7 mins of getting dropped off by the cab, I was in security hold area. The benefits of a small airport in a city like Pune!

I carried printout of the boarding card and thus did not visit the counters. The airline ground staff reached the boarding gate around 0500hours as soon people formed a line. Boarding started early and we were seated by 0525.

At this time, another Jet Airways ATR to Hyderabad was getting ready while two IndiGo birds were parked next to us which would make a trip to Chennai & Kolkata respectively. Spicejet aircraft arrived from Sharjah, which would then turn around for Bengaluru.

The aircraft was non Boeing Sky Interior (BSI) bird with yellow lighting in 12 business class seats and 156 economy. The loads were brilliant with 11 out of 12 seats occupied in Business and almost all occupied in economy.

Inflight & Meal

Doors closed at 0540 and we pushed back on time and were holding before entering active, probably for clearances since there was no other movement at that time of the day. We soon entered active runway 10 and took off in easterly direction, banked right to reach cruising altitude.

The seat belt signs were soon switched off and the meal service started. The meal consisted of a Paneer Roll or a chicken roll. I opted for the later. The tray comprised – the snack, a bottle of water, kitkat, the famous Imli and AVA discounted items card.

The meal was not adequate for that time of the day. I would have preferred tea/ coffee with lighter snack rather than chicken roll which wasn’t upto the mark in terms of taste.

There is a lot that the airline needs to do in terms of food improvements.

The aircraft on the other hand was clean. Not just the seats but also the windows.

Deplaning

We landed on runway 09 at Bengaluru and taxied to one of the aero bridges. Since the flight was going onwards to Kolkata – security staff at the gate checked our boarding passes before we set out.

Overall Verdict

In the last few months, Jet Airways is improving in leaps and bounds. I had an opportunity to connect with the top management with few suggestions and the promptness with which they were responded too along with the way of response was commendable.

The airline needs to work towards fleet standardization and improvements in food. The last year has seen it become number 2 in On Time Performance at all airports and in few months leading the pack too.

Will I fly Jet Airways again? – I think I will, costs matching the competition, good timings and Frequent Flier Program points – make it an attractive option.

Flight Summary

9W 2363 Pune to Bengaluru

VT-JGK B737-800 (WL)

MSN: 32579

13.3 years old

Configuration: 12J / 156Y

STD: 0545; ATD: 0545

STA: 0710; ATA: 0700

Baby Steps to 2017 - Jet Airways declares profit after seven quarters

This article has been jointly written by Prathamesh Kini & Ameya Joshi

Aviation industry in India is noticed more for wrong reasons than for the good reasons and thus Spicejet made most of the news in the last quarter. What the industry missed out on was the constant growth in share price of Jet Airways – in a quarter traditionally considered good for the industry and in the case of Jet Airways – the one in which it shifted to a full service model.

Net profit was a foregone conclusion since the airline had already announced that amount received by the sale of Jet Privilege – the frequent flier program, will be shown in tranches. The eyes were thus set on operating profit.

As late last evening Jet Airways announced results, it indeed report a wafer thin operating profit, its first after seven consecutive quarters of losses. Improvements came all across, however there continued to be some areas of concerns.

The airline reported an overall profit of INR 63 Cr for the third quarter of FY14-15. For the past 9 months, the airline now stands at a loss of INR 84 Cr with very slim chances of closing the year on a profitable note. The airline continued to post proceeds from the sale of Jet Privilege Frequent Flier Program to Etihad as part of its balance sheet this quarter.

The results of Q3 have a lot of positives, with the foremost being an impressive 11.5% increase in Total revenues taking it to INR 5051 Cr on a Y-o-Y basis. The operations are now sustainable on the back of this climb in revenues and lower cost due to decrease in fuel cost (11% reduction in expenditure Y-o-Y). Total Expenses have increased by 5.4% to Rs. 5014.5 Cr. y-o-y, aided primarily by drop in fuel costs and a stable currency exchange. Going forward, these costs will stabilize based on outlook for global oil prices and Indian economy. However the conversion to full service model, advertising its umpteen runs to Abu Dhabi from across the country and fleet conversion has come at a cost – which has led to an increase of expenditure by 42.8% Y-o-Y to INR 502.1 Cr.

Its time to cheer for specialists looking to make a career in Aviation, as the airline saw addition of manpower, taking the headcount to 12,897 employees an addition of 9.3%. It is good to see an operating profit of INR 36.6 Cr. (without income from Sale & Lease Back). When your core operations start making money, the signs are always bright for shareholders! This reminds of a Guy Finley quote 'Being fully present is the best guarantee for a bright future'.

While it was always believed that the investment by Etihad would be used to retire old high cost debt, the interest component paid up has reduced by just 1.6% to INR 226.4 Cr on absolute terms and this should be a concern in the longer run. However, most of this is offset by  operating profit and income from Sale & Lease Back which stands at INR 219.7 Cr. This situation should temporarily ease frayed nerves of the lenders. With a positive outlook on economy for the next few quarters, the airline looks on track to achieve an operating profit in 2017 as it has aimed for. This will come at the back of fixed or decreasing interest dates since income from Sale & Lease back will not continue for long.

Without exceptional items, the company has posted a loss of Rs. 6.7 Cr. which seems a lot more positive as compared to losses of Rs. 235.2 Cr. in Q2FY15 and Rs. 289.0 Cr. in Q3FY14. The overall rejig and stability at Jet Airways has been cheerful for the shareholders too, with Earning Per Share of INR -9.4 for the three quarters of FY15 as compared to INR -167.3 in the corresponding period last year.

Passenger growth has been phenomenal at 13.8% led by fare sales but growth in revenue has been 10.6% with RASK growing 1.7% Y-o-Y. The combined effect has led to a drop in average gross revenue per passenger by 2% to INR 8504.

While the company has managed to achieve break-even load factors (including exceptional items), in the long run we believe that the company should release break-even load factors without exceptional items, since they will not be a permanent feature on the P&L.

Jetlite operations

The operations continue to be a drag on the balance sheet. While operations are being reduced progressively that had led to a reduction of 17.5% departures yet an improvement in load factor to 82.7%, the break-even load factor continues to be very high at 97.3%. The average revenue per passenger is a meagre INR 4433, almost half of that of the parent.

The reason for the lower average revenue is also due to the sectors on which Jetlite aircraft are operating at the moment. Slowly but surely, the sub brand will be phased out and if that is going to take time, the aircraft would be repainted to remove brand confusion.

Points to Smile

• Profits are profits and even a marginal one is a good beginning
• 10.4% increase in passengers carried
• Seat factor up by 5.2% to 82.1% almost equal to break-even load factor
• Exponential increase in code share traffic

Points to ponder

• Overall FY14-15 will be a loss when Q4 results are declared
• Q4 is considered weak and a resurgent Spicejet will initiate a lot of sale and offers
• Vistara is expanding on key Mumbai – Delhi route
• Q4 will be first full quarter with Full Service Model 

Way Forward

The airline is now focusing on domestic as well as international operations. Reduction in services by Spicejet would have helped grow yields since the network overlaps at multiple stations. The shift to Full service will also distinguish itself from market leader IndiGo – which continues to grow rapidly. Vistara will take time to catch up country wide and the dual fleet strategy of Jet Airways will continue to feed its network at major metro’s.

The airline intends to return to absolute profitability till 2017 and we believe that the balance sheet will continue to be black till then, either by showing the money received on account of the strategic sale of Jet Privilege or later on Sale & Lease Back transactions.

The airline could now place an order for a mix of B737MAX and ATR72-600. Standardization is a major problem which the airline needs to come up with sooner or later. With the SAARC and Middle East flights on Narrowbody – the customer experience is paramount when competing with modern widebodies from competitors.  

Analysis of the results of last quarter can be found here

Air Canada returns to New Delhi effective November’15

In an unexpected announcement, Air Canada (IATA code AC) announced resumption of services to New Delhi (IATA code: DEL) beginning November’15. (Winter Schedule-2015). The flights will be operated by B787 Dreamliner aircraft, and the press release claims this will be the first route with the longer range B787-9, which will operate on two of three weekly services proposed by the airline.

The airline will operate this non-stop service four times a week,

Flight	From	To	Depart	Arrive	Days of the week
AC050	Toronto	Delhi	20:55	21:15 (+ 1 day)	Monday*, Wednesday, Friday, Sunday
AC051	Delhi	Toronto	00:45	05:00	Tuesday, Wednesday*,Thursday, Sunday

Departure from Toronto on Monday & from Delhi on Wednesday will be operated by B787-800.

Historic and current links to Canada

While Air India operated Amritsar – Delhi – Toronto flight, the same was pulled out owning to heavy losses in May’12. Air Canada also,in the past operated flights on the Toronto – Delhi sector. Both the airlines had flown this route with the B777 variants and Air Canada will benefit from the favorable economics of the B787 over the B777.

Currently only Jet Airways operates a flight to Toronto, via its hub at Brussels from Delhi, with connections from Mumbai.  With talks of Jet Airways shifting its hub from Brussels to Amsterdam or to Abu Dhabi, the future of flights to Toronto would be in question.

B787 – Dreamliner

The aircraft has its share of problems across the globe, including with Indian national carrier Air India. While Air India has two class configurations, Air Canada has configured its Dreamliner’s (B787-800 variant) in three class configurations with 20 Business, 21 Premium Economy and 210 Economy class seats. The Star Alliance member is yet to reveal the configurations of its longer B787-900 variant.  

While the B787-900 will have wingspan and fuselage same as those of the -800 variant, it is expected to be longer by 6 meters and higher Maximum Take Off Weight (MTOW), with a range of 15372km, compared to 14500km of the smaller B787-800 variant.

Delhi Hub & Connectivity

Not long ago, Star Alliance had made intentions clear about having a hub at Delhi along with Mumbai. Clearly the entry of Air India in Star Alliance is helping Delhi develop itself as a hub, along with attracting global traffic.

As per existing schedules of Air India, the inbound flight would connect to multiple destinations

Inbound
Connection Time	Destination
1 - 3 hours	Mumbai(AI), HongKong(AI), Bangkok(TG)
3 - 6 hours
6 - 9 hours	Ahmedabad(AI), Lucknow(AI), Pune(AI)
9+ hours	Khatmandu(AI), Hyderabad(AI), Chennai(AI), Kolkata(AI), Kochi(AI)

Outbound
Connection Time	Destination
1 - 3 hours	Chennai(AI), Mumbai(AI), Ahmedabad(AI), Kochi(AI), Kolkata(AI), Bangkok(TG)
3 - 6 hours	Singapore(SQ), Pune(AI), Hongkong(AI), Lucknow(AI)
6 - 9 hours
9+ hours

Re-timings would help Air Canada connect both ways to Singapore on Singapore Airlines, while it would already connect to Bangkok on Thai Airways – both Star Alliance members.

Concerns

While this new link is a welcome move, the traffic between Canada & India has remained stagnant for a while. The traffic patterns are mainly seasonal and there are ample options available via Europe, Middle East & the USA.

Resistance of Canadian government to grant more rights to Middle Eastern carriers and requirement of US visa for transit would benefit this non-stop service of Air Canada. 

Jet Airways shift to Full Service, how are the Jetlite flights being managed?

On 11^th August in a joint press conference with Etihad, Naresh Goyal, Chairman of Jet Airways announced the shift to a Full service model. Vistara, the yet to fly full service carrier, a joint venture of Singapore airlines & TATA group and Air India, after its entry into Star Alliance was considered tough competition in the full service space.

The mixed model

As Kingfisher Airlines bought Air Deccan to have presence in growing Low cost segment, Jet Airways bought Air Sahara, then a full service carrier and converted it to Jetlite, a low cost arm of the parent. All the CRJ-200s were retired, the airline pulled out of few sectors and others were converted to ATR flights, which were operated by Jet Airways. Later, a new segment came up, flights which would be called Jet Konnect, which was low cost offering of the mainline. Many aircraft saw decals of “Konnect”, over Jet Airways titles on the fuselage and these were to operate on Tier-II routes. However, as expected, the aircraft flew all across leading to confusion in minds of passengers.

Soon there were rotations, where flights went from Origin to Destination as Full service and returned as Low Cost, carrying food to be given out in the first leg and on return, the crew would sell on board!

First Blink

What options did one have on the service front?

• Aircraft – Jet Airways metal
• Business Class & Economy Class Full service
• Business Class & Economy Class – Buy on Board (BoB) in Konnect

•           Aircraft – Jetlite (Ex- Air Sahara aircraft)
•          Business Class & Economy Class – Buy on Board (BoB)Business

As this confusion started affecting the airline, first of many changes were made. This included having premium cabin being served complimentary food, across Jet Airways, Jet Airways Konnect & Jetlite.

The second change involved doing away with Jetlite and having two offerings, Jet Airways & Jet Airways Konnect. This also was confusing for the travelers, because the aircraft operating under Air Operators Permit (AOP) of Jetlite continue to have the light blue livery with Jetlite prominently written on the fuselage.

Just before the shift

Jet Airways was in news for planning to shift ATR fleet to Jetlite and also its plan to shift pilots creating road blocks, issues related to seniority and much more!

Thankfully, common sense prevailed and Jet Airways decided to make a move to Full service offering. The now defunct Kingfisher Airlines, had made a similar statement but it was too late in the survival cycle for them to invest, change and make the move. The airline shifted to what they called a holding pattern and later stopped operations, much before they could complete re-configuration of their aircraft and shift to a full service model.

Code share

With court cases, ruling out a merger between Jet & Jetlite, the airline resorted to code share, a common practice globally, but unique in this case since it is between the airline & its subsidiary. It involves each airline publish and market the flight under its own airline designator and flight number. Seat can be purchased on either of it but the flight is operated by only one, known as operating carrier.

The seat and revenue sharing could be done in multiple ways

•        Set number of seats are given by the operating airline to its code share partner and the partner airline maintains a separate inventory and sells it. The operating airline gets a fixed cost for sold/ unsold seats

•        No restriction on seats, where in both airlines open up all seats for sale. There could well be a cap on maximum seats sold under this arrangement

Code share between Jet Airways & Jetlite did have issues for the passengers, since until recently the passengers booked on 9W code with operating carrier being Jetlite were not able to do a web check-in!

Move to Full service

The move to full service on 1^st December was a silent affair. An email to frequent fliers, statement on social media and the website jetkonnect.com directing users to jetairways.com was all that happened, along with meals being served on all flights, irrespective of which aircraft the flight was being flown on – Jet airways Boeing, Jetlite boeing or Jet Airways ATR.

However, due to legal disputes, the Jetlite AOP (S2 code) continues to be in operation and there are 4 x B737-700, 5 x B737-800 and 1 x B737-900 which are part of Jetlite AOP and remain in operation. Amongst them, they operate 564 flights a week. As part of this move to full service, the passenger would get complimentary food in these flights, but how is Jet Airways managing the Flight numbers, Inventory and trying to be seen as one airline ?

Complex or Simple – Code share to the rescue

Prima Facie, this is how Jet Airways seems to be managing the move. The airline had said it will throw more light on this before the move, but hardly did it give out the details of the move. The answer to how Jet Airways is managing two Air Operating Permits lies in Code Share.

Readers would recollect how an online booking engine would show flights under 9W code (9W 7xxx) and S2 code when they would search for flights on some sectors where both were operating (Eg: Mumbai – Bhopal – Mumbai or Delhi – Chandigarh – Delhi). The flight times would be same, but there would be marginal fare difference owing to how code share is handled).

After the move on 1^st December, entire inventory will be managed by Jet airways code (9W 7xxx) and inventory for S2 code, the original flight number will be zeroed out. For operational reasons, the flight plan, ATC, would continue to consider the Jetlite aircraft as an aircraft operating with S2 code and S2 flight number.

A random search on online travel portals reflects these changes and now you can see only one entry for a particular flight, unlike two in the past.

Way forward

The airline has effectively used Code Share as a tool to make this one brand strategy work. However, the livery remains different for the Jetlite aircraft. They would either be moved (sub leased / leased / sold) to Jet Airways, like it happened with VT-JLJ, a B737-900 with Jetlite and now with Jet Airways or just see a chance in livery from existing light blue to mainline colors to further reduce confusion.

But in a country obsessed with food – the first cut has been made. “Jahaj kaunsa bhi honedo, khana jarur milega jee” (Let there be any aircraft, you will certainly get food)