KLM HAS AGREED the basis of a far-reaching commercial partnership with India's second- largest private airline, Jet Airways.
An initial memorandum of understanding was signed on 29 August and executives from the two carriers will meet soon to flesh out the proposed co-operation and discuss possible future expansion.
The development follows earlier announcements by regional competitor ModiLuft that its technical and operational co-operation with Lufthansa has been elevated to a strategic alliance, which includes a management contract and linked frequent-flyer programmes. ModiLuft has also offered Lufthansa the chance to take a shareholding, which would help the Indian carrier to acquire up to seven more Boeing 737-400s.
KLM's Jet Airways deal will not be backed by an equity holding, however, since the airline has already reached India's maximum 40% limit on foreign ownership. Gulf Air and Kuwait Airways each holds a 20% stake, the remainder is held by the Jet chairman, Naresh Goyal.
The co-operation will centre on the co-ordination of schedules to provide connections with KLM's seven weekly flights to India, serving Bombay, Delhi and Calcutta. The two carriers will link marketing and frequent-flyer programmes and share resources such as crew training, maintenance and reservation systems.
Jet Airways has already purchased the Codeco computerised check-in and flight-handling system developed by KLM, for installation at its 19 stations. Once in operation, Jet Airways passengers will be able to check through on all segments of the flight, including connecting KLM services.
Another element of the partnership is the previously agreed management-consultancy contract, including the management of catering and cabin-crew services. KLM's Bart Drechsel has been seconded to Jet Airways as senior manager for customer services.
Jet Airways began operations on 5 May, 1993, and has become India's second-largest independent airline, carrying 1.7 million passengers in 1994. It operates four Boeing 737-300s leased from Ansett Worldwide, and another three 737-400s from Malaysia Airlines.
Rival ModiLuft - which already operates four surplus Boeing 737-200As on lease from Lufthansa - also has ambitious growth plans, as outlined by chairman Satish Kumar Modi. The carrier plans to acquire four newer 737-400s on leveraged lease and has applied for approval to import three more aircraft.
Lufthansa has been given until the end of the year to make a decision on taking an equity stake in ModiLuft, but may face opposition within India to foreign ownership if it decides to proceed. The plan by Singapore Airlines to form a joint airline with India's Tata Industries failed on similar objections.
Source: Flight International