Jet Airways

South African Airways codeshares with Etihad and Jet have mutual advantages for all - except Star

South African Airways has become the latest carrier to join the embrace of the Gulf carriers, signing a codeshare agreement with Etihad which adds 22 new codeshare connections between Africa and the Middle East and follows another important codeshare agreement with India’s Jet Airways. The agreements mark a shift for cash-strapped SAA towards recognition that as an end-of-line carrier it must develop a more virtual long-haul network. Such partnerships are part of SAA’s long term turnaround strategy and allow the carrier to extend its network without the need to commit capital to expensive long-haul aircraft.

SAA acting CEO Nico Bezuidenthout said the codeshare agreements would grow the carrier’s revenue, with initial expectations that the Etihad partnership would add about ZAR100 million (USD11 million) a year to revenue.

Meanwhile Etihad will increase its already comprehensive African coverage with the addition of SAA which improves access to the continent’s biggest economy.

Indian Aviation in 2013/14: Jet Airways expected to place 737 MAX and A320neo order

CAPA will shortly release its keenly anticipated annual India Aviation Outlook Report for 2013/14. In this first of a four-part series of extracts from the full 200+ page report, we look at the changing dynamics of the airline sector on both domestic and international routes.

Part 2 examines the policy vacuum that exists in India and the impact this has on the viability and development of the sector. Part 3 will address key issues in airport and airspace infrastructure while Part 4 will consider the outlook for traffic, capacity, yields and airline profitability.

This article reviews some of the key points from the Outlook Report.

Etihad jolts the status quo again – Jet Airways and (wait for it) Air Canada are its newest partners

By purchasing a large minority share in Jet Airways, Etihad enormously entrenches its long term global position, as it secures intimate access to one of the world’s fastest growing markets. The deal is accompanied by expanded bilateral access and a new US pre-clearance facility at Abu Dhabi Airport. The near-billion dollar deal will not only radically shake up the Indian market – to the substantial disadvantage of now-marooned Air India – but the ramifications will be felt well beyond Indian borders.

And right on the heels of this announcement comes the remarkable news that staunch Gulf airline opponent Air Canada is to codeshare with….Etihad. For now the scope is limited – but it will expand, as Etihad’s virtuous circle spreads.

Singapore Airlines Group and Changi Airport to benefit as India-Singapore market opens up further

The Singapore-India market is poised for a modest increase in capacity, driven by further expansion from the Singapore Airlines (SIA) Group made possible by the recent signing of an expanded bilateral between the two countries.

The updated air services agreement only increases the previous capacity allotment for Singapore-based carriers by 10%. But SIA will take whatever it can get as Singapore-India is an important and generally under-served market. Incremental increases are typical with the India-Singapore bilateral, which has been updated several times in recent years, although Singapore would prefer a much bigger and broader agreement.

SIA along with full-service subsidiary SilkAir and low-cost carrier affiliate Tiger Airways already account for over 70% of capacity between India and Singapore. Indian carriers do not require a revised bilateral as they were using less than 40% of the prior allotment. Indian carriers over the last year have seen their share of the market decrease and may see their share drop further by the end of 2013 as the SIA Group again boosts capacity to India.

Air India Outlook: a business model beleaguered on all fronts

In this second extract from the CAPA India Aviation Outlook 2013/14 we look at the growing challenges to flag carrier Air India’s business model.

A combination of stronger Indian competitors as a result of foreign airline investment, the growth of LCCs, the opening up of the international market in the form of bilateral liberalisation and the changing nature of global alliances, will impact each of the three key areas of Air India’s operations – long-haul international, regional international and domestic – each of which we will consider in turn below.

Etihad’s potential investment in Jet Airways to be a game-changer for India

Jet Airways is expected to be the first incumbent airline to take advantage of the Sep-2012 decision by the Indian Cabinet to permit up to 49% foreign investment in Indian airlines.

Allowing foreign airline investment is a vital step in establishing a more professional and corporatised sector in India. It offers the promise not only of introducing strategic capital and expertise into the market, but also delivers a much needed confidence factor for other institutional funding.

However, a big drawback remains the weakness of India’s underlying regulatory framework and the structural challenges in Indian aviation. Until a host of typically Indian nit-picking bureaucratic and political issues are squared away, it remains a lottery investing into the country. That is a fundamental issue for any government serious about encouraging measures to generate consumer (and corporate) benefits.