Developing story. Only some tweets are available as of now.
https://mobile.twitter.com/CNBCTV18Live ... 6336764928

It's an extremely interesting news though. In a way, EY and DL will unite in investing in 9W. They will have to talk with each other for all 9W related things.
Further, I think if this sale goes through, 9W's valuation would be rather too low at around $1.3 billion.

Seems like DLs shopping spree never ends.
Would like to see if this finally results in 9W joining Skyteam considering how close they've been getting with members.

Another link: http://www.moneycontrol.com/news/busine ... 17291.html

Should be interesting if this happens with Etihad involved.

So could this mean Jet Airways will become a Skyteam member in the future?

Not a big surprise given Delta's previous purchases into large, core markets (Brazil, UK, Mexico, China) and the cozying relationship between DL/AF/KL and 9W (including the recent appointment of former Delta exec Vinay Dube as 9W's new CEO, and Delta elevating 9W to the tier 1 group of airlines in its Skymiles program, a tier normally reserved for airline partners in which Delta has a stake and/or joint venture).

Jerry123 wrote:

So could this mean Jet Airways will become a Skyteam member in the future?

Not necessarily - just look at GOL and Virgin Atlantic..Delta has equity stakes in, and/or joint ventures/extensive codeshares with these two and neither of them are in Skyteam (and don't seem to be showing any inclination to join anytime soon).

Excellent move. But if 9W already maxed out on external working capital loans, even DL cannot help. All plans will go haywire if they have to borrow only from Indian banks.

One cannot borrow at 15% to run a 4% margin business. Indian government needs to realize this issue and lift the restriction on external borrowing.

dtw2hyd wrote:

Excellent move. But if 9W already maxed out on external working capital loans, even DL cannot help. All plans will go haywire if they have to borrow only from Indian banks.

One cannot borrow at 15% to run a 4% margin business. Indian government needs to realize this issue and lift the restriction on external borrowing.

I think rather they need this money for down payment for their upcoming 125 B737Max order.

Just been reading about the. DL video about the evils of the ME3.

Does this not include EY.

bennett123 wrote:

Just been reading about the. DL video about the evils of the ME3.

Does this not include EY.

9W funnels a lot of India-US traffic via AUH. DL might be trying to change that.

9W, VA, EY, VS, and GOL would all be decent adds to Skyteam. Fill a few holes in the network.
With all, except EY sharing at least some tie to DL

However, new membership to alliances is quite rare these days, with much more emphasis being placed by individual airlines on orchestrating their own agreements.

Would this be even legal? I thought India only allowed airlines to be 49% foreign owned. Given that EY already owns 26%, wouldn't this cross that threshold?

AI126 wrote:

Would this be even legal? I thought India only allowed airlines to be 49% foreign owned. Given that EY already owns 26%, wouldn't this cross that threshold?

The article posted by cokepopper makes it sound like EY's stake would be 24%, should the transaction go through.

anshabhi wrote:

I think rather they need this money for down payment for their upcoming 125 B737Max order.

9W can borrow from any global financier for aircraft purchases at very competitive rates, not an issue.
But even with two well-off partners (EY and DL), 9W cannot bring in working capital loans from outside at competitive rates.

I think creative accounting is the only way out. Overvalue the company, pay $1Billion for 24%, or find a sovereign fund/private equity to pick up rest of 51% to clear debt and have enough cash-on-hand.

Foreign airlines are limited to 49%, foreign funds can own rest of the stake up to 100% subject to approval.

AI126 wrote:

Would this be even legal? I thought India only allowed airlines to be 49% foreign owned. Given that EY already owns 26%, wouldn't this cross that threshold?

I think a single airline can own upto a maximum of 49%. Multiple airlines can even reach 100%, combined.

Foreign airliners can own a maximum of 49% in an Indian airline. Non airline foreign entities can own even 100% of an Indian airline.

Easy decision for Jet; use capital to pay high interest debt.

They already have underutilized 777/330 fleet. With DL in control of route planning, the fleet can be gradually leveraged to improve operations. Who knows, there may be some AMS/CDG/LHR-US spokes to a non-DL hub city.

Recently, DL had to pare-down LHR-PHL flights. By getting additional feed from Jet Airways, perhaps some of these cities come into play.

anshabhi wrote:

dtw2hyd wrote:

Excellent move. But if 9W already maxed out on external working capital loans, even DL cannot help. All plans will go haywire if they have to borrow only from Indian banks.

One cannot borrow at 15% to run a 4% margin business. Indian government needs to realize this issue and lift the restriction on external borrowing.

I think rather they need this money for down payment for their upcoming 125 B737Max order.

Source? Or is this just a rumor you're starting?

bennett123 wrote:

Just been reading about the. DL video about the evils of the ME3.

Does this not include EY.

That's more about public support and less about facts.

Heck QR was eyeing a stake in AA.

Delta invests in high quality airlines (AM,VS,GOL) that bring strategic benefits to their network. Jet would be a good addition.
Not like the Etihad group with their diaspora reminiscent of the failed Swissair group.

anshabhi wrote:

Further, I think if this sale goes through, 9W's valuation would be rather too low at around $1.3 billion.

This. That sounds like a hell of a bargain for DL.

Shocking and very coincidental! things are moving very quick at 9W.... Vinay Dube from Senior Vice President - Asia Pacific for Delta Air Lines becomes the CEO of Jet Airways.
Sources:
http://news.delta.com/leader-bio-vinay- ... ia-pacific
http://www.livemint.com/Companies/6Tw3N ... s-CEO.html

newibnbattuta wrote:

Shocking and very coincidental! things are moving very quick at 9W.... Vinay Dube from Senior Vice President - Asia Pacific for Delta Air Lines becomes the CEO of Jet Airways.
Sources:
http://news.delta.com/leader-bio-vinay- ... ia-pacific
http://www.livemint.com/Companies/6Tw3N ... s-CEO.html

Why is that "shocking"? It makes sense than 9W would hire someone competent... as opposed to some political lackey...

Well I hope this makes them take the deliveries of the 787-9 soon and add some new destinations.

alfa164 wrote:

It makes sense than 9W would hire someone competent... as opposed to some political lackey...

You do realize that 9W is not government owned so the CEO is not a political appointment right? You have it confused with AI

VTORD wrote:

alfa164 wrote:

It makes sense than 9W would hire someone competent... as opposed to some political lackey...

You do realize that 9W is not government owned so the CEO is not a political appointment right? You have it confused with AI

Umm, but questions about 9W's financing, at least initial, still remain. Anyway, the large point is that it should have gone beyond thinking like 'Not Air India' but with a limited pot of money.

Dubey, with his Delta pedigree, will figure out ways to extract the maximum out of the existing assets. Afterall, Delta operates one of the oldest fleets in the industry quiet successfully.

anshabhi wrote:

bennett123 wrote:

Just been reading about the. DL video about the evils of the ME3.

Does this not include EY.

9W funnels a lot of India-US traffic via AUH. DL might be trying to change that.

I would have to agree that DL may be looking at this with two points of interest: 1) Invest in 9W at bargain rates and get a bigger step back into the Indian market and 2) stop the feeding of passengers to EY to some regard by eliminating some of the feed routes with EY.

Also, if I recall correctly DL and 9W have a codeshare route agreement on DEL/BOM-AMS-JFK/ATL? How has this agreement been working?

I think this is a great decision by Delta if true. I think the US carriers see the only way to really hurt the ME3 is to have a strong presence in India. DL brings the US based corporate clients and Jet the Indian ones.Add DL/AF/KL/VS to give cheap transatlantic seats to US-India transit traffic, and you have a good system of premium and low fares that really drove the ME3. DL will no doubt bring its structure on operating an airline. That is really what Jet missed - the little things on having all parts of the service perfect. DL can help bring that. EY's folly was to just use 9W as a feeder. India is too big of a market to have limited nonstops (that was a dumb idea). Also EY did nothing to improve 9W's service standards. Now if DL will only fix India redemptions. DL makes it really hard for anyone with a connection to India to stay loyal. At 120k for a partner redemption they are way over AA's 70k and UA's 80k

The writing was on the wall when 9W hired Vinay Dube away from Delta. It's a natural fit for 9W and DL to work closely and in the near future invite 9W into Skyteam.

I've heard that KLM, DL and 9W all working together in AMS has been a huge success.

vadodara wrote:

Umm, but questions about 9W's financing, at least initial, still remain. Anyway, the large point is that it should have gone beyond thinking like 'Not Air India' but with a limited pot of money.

I was merely pointing to the fact that there really has been no evidence that 9W's CEO was a "political" appointee. I was assuming political = government interference.

vadodara wrote:

Dubey, with his Delta pedigree, will figure out ways to extract the maximum out of the existing assets. After all, Delta operates one of the oldest fleets in the industry quiet successfully.

I hope so too....came across this article that suggested all wasn't well with 9W's relationship with EY.

http://economictimes.indiatimes.com/ind ... 744533.cms

anshabhi wrote:

I think a single airline can own upto a maximum of 49%. Multiple airlines can even reach 100%, combined.

Errr.... NO!

777Mech wrote:

The writing was on the wall when 9W hired Vinay Dube away from Delta. It's a natural fit for 9W and DL to work closely and in the near future invite 9W into Skyteam.

I've heard that KLM, DL and 9W all working together in AMS has been a huge success.

I could see better traffic in AMS than CDG. BLR and HYD would be good adds.

VTORD wrote:

alfa164 wrote:

It makes sense than 9W would hire someone competent... as opposed to some political lackey...

You do realize that 9W is not government owned so the CEO is not a political appointment right? You have it confused with AI

Of course I realize that.. I was pointing out the differences in the way 9W approaches hiring and how AI operates... night and day...

This is a step in the right direction. However, I have always thought a better option would be to partner with/invest in Indigo which is like India's version of Jetblue and the largest and most profitable airline in India IIRC. That way WE could operate the flights into India and feed their network that way, not unlike EK and B6 here in the states. This agreement with 9W unfortunately will not see DL returning to India with our own metal anytime soon or at all.

Good choice IMO.

But I didn't think Jetuna Matata could spread any wider. Clearly they are more flexible than I thought!

tinpusher007 wrote:

This is a step in the right direction. However, I have always thought a better option would be to partner with/invest in Indigo which is like India's version of Jetblue and the largest and most profitable airline in India IIRC. That way WE could operate the flights into India and feed their network that way, not unlike EK and B6 here in the states. This agreement with 9W unfortunately will not see DL returning to India with our own metal anytime soon or at all.

6E isn't interested in any kind of stake sale, neither are SG or G8...

usdcaguy wrote:

777Mech wrote:

The writing was on the wall when 9W hired Vinay Dube away from Delta. It's a natural fit for 9W and DL to work closely and in the near future invite 9W into Skyteam.

I've heard that KLM, DL and 9W all working together in AMS has been a huge success.

I could see better traffic in AMS than CDG. BLR and HYD would be good adds.

BLR -AMS is already starting on Oct 27..daily by 9W and very soon either of the three 9W/AF/KLM would be adding may be later HYD either from CDG/AMS...

HYD-AMS/CDG would be a great addition for the JV Trio since HYD is one of the biggest in traffic after Gujaratis to US and thus the feed from 9W can be transferred at ease to DL/AF/KLM transatlantic routes to US given if the competitive fares less than ME3

tinpusher007 wrote:

This is a step in the right direction. However, I have always thought a better option would be to partner with/invest in Indigo which is like India's version of Jetblue and the largest and most profitable airline in India IIRC. That way WE could operate the flights into India and feed their network that way, not unlike EK and B6 here in the states. This agreement with 9W unfortunately will not see DL returning to India with our own metal anytime soon or at all.

But Indigo will not bring Delta premium pax. India is a huge market with a large VFR crowd. But it also has good premium demand (contrary to what some on Anet feel). 9W with DL/AF/KL give premium pax in India a credible option aside from the ME3. If DL helps polish 9W's service standards and launch key routes, it will go a long way to help take even more pax from the ME3. Also remember India is a huge source country. There will always be a good portion of people that prefer to fly their own airline internationally (9W helps at that). I actually prefer to fly DL internationally when given a choice (I like DL and DL gives me enough perks to make it worth my while to chose them). As far as serving India, I think DL will return. India continues to grow 6%-8% a year. The A350 and 789 open up more nonstop options (that is what DL will fly - not EU-India). I think DL will want to at least operate JFK-BOM and JFK-DEL nonstop in the next 5 years (with DL flying one route and 9W flying the other). The worst thing DL needs to do is what EY did - invest in India to just use the airline to funnel their flights. A strong 9W will absolutely help DL tremendously and allow DL to launch more flights to India.

CaliguyNYC wrote:

tinpusher007 wrote:

This is a step in the right direction. However, I have always thought a better option would be to partner with/invest in Indigo which is like India's version of Jetblue and the largest and most profitable airline in India IIRC. That way WE could operate the flights into India and feed their network that way, not unlike EK and B6 here in the states. This agreement with 9W unfortunately will not see DL returning to India with our own metal anytime soon or at all.

But Indigo will not bring Delta premium pax. India is a huge market with a large VFR crowd. But it also has good premium demand (contrary to what some on Anet feel). 9W with DL/AF/KL give premium pax in India a credible option aside from the ME3. If DL helps polish 9W's service standards and launch key routes, it will go a long way to help take even more pax from the ME3. Also remember India is a huge source country. There will always be a good portion of people that prefer to fly their own airline internationally (9W helps at that). I actually prefer to fly DL internationally when given a choice (I like DL and DL gives me enough perks to make it worth my while to chose them). As far as serving India, I think DL will return. India continues to grow 6%-8% a year. The A350 and 789 open up more nonstop options (that is what DL will fly - not EU-India). I think DL will want to at least operate JFK-BOM and JFK-DEL nonstop in the next 5 years (with DL flying one route and 9W flying the other). The worst thing DL needs to do is what EY did - invest in India to just use the airline to funnel their flights. A strong 9W will absolutely help DL tremendously and allow DL to launch more flights to India.

Well you make some good points that I had not considered since Im a bit ignorant of the aviation market in India. But knowing our management I fear they plan on doing exactly what you said is a bad idea: partnering with 9W and having them do all the flying between the US and India while we just code share or JV it for the money. This has become the MO of our airline.

Well look at it this way. Jet doesn't fly to the US on it's own metal any more (and even if they restarted some EU/US flights it would be to just EWER & SFO which are the tw cities that really warrant a Jet flight). India traffic will help keep some DL frequencies to AMS, CDG, LHR going in off peak periods (which many times are india peak). So it can be win win. On any nonstop US-India flight that might start, I actually think DL is better positioned than Jet - the highest paying premium pax are US based. What the last DL JFK-BOM lacked was connections on the India side. 9W would now provide that especially if the flight operated with AI's afternoon US departure for an afternoon India arrival.

newibnbattuta wrote:

Shocking and very coincidental! things are moving very quick at 9W.... Vinay Dube from Senior Vice President - Asia Pacific for Delta Air Lines becomes the CEO of Jet Airways.

That was 4-months ago!

tinpusher007 wrote:

This is a step in the right direction. However, I have always thought a better option would be to partner with/invest in Indigo which is like India's version of Jetblue and the largest and most profitable airline in India IIRC. That way WE could operate the flights into India and feed their network that way, not unlike EK and B6 here in the states. This agreement with 9W unfortunately will not see DL returning to India with our own metal anytime soon or at all.

From a DL employee stand-point, unfortunate.

However, Jet Airways comes with slots to several European destinations, an underutilized fleet of 77x/33x and so forth. Indigo offers none of the above.

In reality, no American carrier was interested in serving the Indian emigre traffic nor was Air India competent to do that. That opened up doors for ME3 and rest is history. This may be the best attempt for both a US and an Indian carrier to pick-up some market share.

Sorry, too many missed opportunities here.

a320fan wrote:

9W, VA, EY, VS, and GOL would all be decent adds to Skyteam. Fill a few holes in the network.
With all, except EY sharing at least some tie to DL

However, new membership to alliances is quite rare these days, with much more emphasis being placed by individual airlines on orchestrating their own agreements.

Who says they are going to join.
EY isn't that interested in joining a alliance.They sort of already have one in the form of Etihad partners which works just like an alliance but with all EY investments. However AB is currently a OW member but I don't see EY joining one same with VA.
However VS I do see joining Skyteam due to decent links to the group and not sure Gol would as well.
9W it would help a lot but would it work?

vadodara wrote:

tinpusher007 wrote:

This is a step in the right direction. However, I have always thought a better option would be to partner with/invest in Indigo which is like India's version of Jetblue and the largest and most profitable airline in India IIRC. That way WE could operate the flights into India and feed their network that way, not unlike EK and B6 here in the states. This agreement with 9W unfortunately will not see DL returning to India with our own metal anytime soon or at all.

From a DL employee stand-point, unfortunate.

However, Jet Airways comes with slots to several European destinations, an underutilized fleet of 77x/33x and so forth. Indigo offers none of the above.

In reality, no American carrier was interested in serving the Indian emigre traffic nor was Air India competent to do that. That opened up doors for ME3 and rest is history. This may be the best attempt for both a US and an Indian carrier to pick-up some market share.

Sorry, too many missed opportunities here.

Regarding it point stating underutilization of 77W/333/332..they are fully utilised upto core now.Infact 9W has ordered 737 max inorder to free up the 333/332 on some SE Routes in order to explore new routes.Already in October they are Starting BLR-AMS and MAA-CDG.The 9W widebodies are not at rest they are full utilised each day.

One thing that will not change: DL's paxex is too infamous for anyone to choose them over ME3.

deltadawg wrote:

Also, if I recall correctly DL and 9W have a codeshare route agreement on DEL/BOM-AMS-JFK/ATL? How has this agreement been working?

The 9W/DL cooperation goes a lot further than just DEL/BOM-AMS-JFK/ATL !

The cooperation also includes AF/KL and VS, in addition to the 9W/DL flights.

Here is a sample of the joint network over AMS:

- DEL-AMS-BOS / BOM-AMS-BOS / BLR-AMS-BOS
- DEL-AMS-EWR / BOM-AMS-EWR / BLR-AMS-EWR
- DEL-AMS-JFK / BOM-AMS-JFK / BLR-AMS-JFK
- DEL-AMS-IAD / BOM-AMS-IAD / BLR-AMSIAD
- DEL-AMS-DTW / BOM-AMS-DTW / BLR-AMS-DTW
- DEL-AMS-MSP / BOM-AMS-MSP / BLR-AMS-MSP
- DEL-AMS-ORD / BOM-AMS-ORD / BLR-AMS-ORD
- DEL-AMS-ATL / BOM-AMS-ATL / BLR-AMS-ATL
- DEL-AMS-IAH / BOM-AMSIAH / BLR-AMS-IAH
- DEL-AMS-MIA / BOM-AMS-MIA / BLR-AMS-MIA
- DEL-AMS-SEA / BOM-AMS-SEA / BLR-AMS-SEA
- DEL-AMS-PDX / BOM-AMS-PDX / BLR-AMS-PDX
- DEL-AMS-SFO / BOM-AMS-SFO / BLR-AMS-SFO
- DEL-AMS-SLC / BOM-AMS-SLC / BLR-AMS-SLC
- DEL-AMS-LAX / BOM-AMS-LAX / BLR-AMS-LAX
- DEL-AMS-YYZ / BOM-AMS-YYZ / BLR-AMS-YYZ
- DEL-AMS-YUL / BOM-AMS-YUL / BLT-AMS-YUL
- DEL-AMS-YYC / BOM-AMS-YYC / BLR-AMS-YYC
- DEL-AMS-YEG / BOM-AMS-YEG / BLR-AMS-YEG
- DEL-AMS-YVR / BOM-AMSYVR / BLR-AMS-YVR
- DEL-AMS-MEX / BOM-AMS-MEX / BLR-AMS-MEX

And the same again (and more) for 9W/AF/DL on INDIA-CDG-USA/Canada/Mexico
And the same again (and more) for 9W/VS/DL on INDIA-LHR-USA/Canada

Jet is United's 'Worldwide' Partner with several onward connections to Indian cities through BOM and DEL (although AI is the Star Alliance member). This change may push United to start more codeshare with AI (unwillingly...!)

tinpusher007 wrote:

This is a step in the right direction. However, I have always thought a better option would be to partner with/invest in Indigo which is like India's version of Jetblue and the largest and most profitable airline in India IIRC. That way WE could operate the flights into India and feed their network that way, not unlike EK and B6 here in the states. This agreement with 9W unfortunately will not see DL returning to India with our own metal anytime soon or at all.

There is no way WE can operate profitably.

ULH flights are not as economical as MH flights. Fuel burn and crew costs are two major factors. You burn lot more fuel carrying dead weight on 9+ hour flights. One set of the crew probably can do 2 ULH round trips in a month under FAA FTL/FDTL rules.

Two 8hr-9hr legs with a break are much comfortable than one 16hr + one 4hr.

True one-stop combinations.
AI JFK/EWR/ORD/SFO to 41 Indian cities (164 combinations).
ME3 - 12 US cities to 12 Indian cities (144 combinations)
DL/AF/KL/VS/9W - 31 US Cities to say 6 Indian cities. (186 combinations)

DL ATL/JFK to DEL with 6E interline gives probably 60 combinations. Assuming ATL/JFK have feeds most passengers will end up with two stops.

What DL doing is perfect, if they find a low-cost partner like TUI fly at AMS to connect more low yield India destinations, nobody can beat them.

I flew Jet from AMS to BOM earlier this year and thought the business class food and service were excellent. I'm told that coach isn't terribly good, so DL would be able to help there.

Many people I know have had bad experiences with DL but I've always had a good experience with them. Last summer, I got to MIA a bit later than I should have and got denied at check in (I wouldn't have if I didn't have check in bags with me). The agent was super nice and actually managed to get my luggage onto the flight and put me on later flights to my final destination, all with no charge. I predict Jet will be good with Delta and it would give them a bigger foothold in India as well.