Jet Airways Cancels Its Service To Abu Dhabi

This comes as a huge surprise. Starting today, Jet Airways cancelled all its flights from Abu Dhabi citing operational reasons.

The Details & Aftermath

Jet Airways flies to Abu Dhabi from three cities in India – Delhi, Mumbai and Pune. Here is a list of affected flights

Obviously, nobody likes their flights to be cancelled at short notice. Moreover, a significant amount of traffic from Jet Airways into Abu Dhabi feeds into Etihad’s global network. This could mean missing connecting flights, less time at transit etc. Twitter is full of messages from inconvenienced passengers. They are having a hard time reaching Jet Airways – some waiting on the phone for an hour!

Impact on Jet Airways and Etihad deal

It has been a few hours since the cancellation was announced. So far, neither Jet Airways nor Etihad has said anything adverse on the deal.

Further, Jet Airways has also reduced its service to Dubai, Singapore and Doha. However, so far, only Abu Dhabi has been a complete shutdown. There could be two reasons for this.

Either, Etihad and Jet Airways are progressing well on the transaction. Etihad continues to operate India – Abu Dhabi flights and is likely to accommodate passengers whose flights have been cancelled. The Twitter feed of Etihad shows several passengers who have been provided an alternate flight. However, if the deal was on track, both airlines should have done better than to inconvenience so many passengers!

The other scenario is that the negotiations aren’t going anywhere. Jet Airways needs funds desperately and Abu Dhabi cancellations could be a signal to Etihad. Already, market rumors abound that Jet Airways is approaching Qatar Airways as an alternate investor. If this rumor is true and the deal materializes, it would surely be the end of Jet Airways and Etihad relationship.

We know all is not going well between Etihad and Jet Airways. The deal to infuse funds in Jet Airways was always going to be complex. There are multiple reasons for this – foreign investment rules in India, Etihad’s change in strategy, Naresh Goyal’s reluctance to step down and lack of clarity around the viability of Jet Airways.

About a month back, I had written extensively about the problems plaguing this deal. You can read about the issues here (link).

Conclusion

Is this the end of Jet Airways?

I spoke to a couple of aviation experts in India. They were of the opinion that nothing would happen before May. This is when India has its parliamentary elections and an airline going bankrupt would not send out right signals for the government.

Till then, Jet Airways could hope for a white knight.