Like I wrote yesterday, Jet Airways finally dried the ink on their partnership with Etihad Airways. One fourth of the value of the whole transaction is being generated by the frequent flyer program of Jet Airways, which was spun off into a separate company in December 2012. Etihad is going to pay $150 million for a majority stake in the loyalty program, which I assumed was going to be about 60% at least.
I tried valuing the different membership tiers to arrive at a value of each membership tiers, and this is pure speculation, but do tell me if you think this is in line with valuations you would expect to be a JetPrivilege member.
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Posted by Live From A Lounge |
Tags: 9W, Etihad, Etihad Guest, EY, Jet, Jet Privilege
This afternoon in India, Jet Airways’ Board of Directors put their agreement to receive a fresh induction of $380 million by Etihad Airways, who in turn will get 24% of the expanded equity capital of Jet Airways, thus making Jet Airways a part of the Equity alliance of Etihad Airways, where Etihad is sewing up partnerships with various airlines by picking up equity stakes in them. I first wrote about this possibility back in September and while the deal was close to being struck then, it took quite some back and forth in the few months ahead to come to a consensus.
Etihad confirmed later in the day that they were taking the 24% stake for $379 million dollars, and will also infuse $150 million into Jet Airways frequent flyer program JetPrivilege, and reciprocal earn and burn opportunities between both programs. Jet Airways already had sold their three pairs of London Heathrow slots to Etihad earlier, to receive $70 million in cash. Jet Airways was working as of last year to make a separate business entity for its frequent flyer program.
A part of the terms of the deal is to have Jet Airways make a hub in Abu Dhabi, and Jet Airways gets a preferential loan from Etihad’s lenders for $400 million, all of which helps Jet Airways retire its debt of $2 billion. There is also news that Jet could be leasing away some of its Airbus 330-200 planes to Etihad.
Also, while there is no news of Jet Airways wrapping up its current flights to the USA, the proposed increasing number of flights to Abu Dhabi will also be helped by transit to the USA with a pre-clearance, which may come into play soon. Jet has plans to start, along with Etihad, 23 new city pairs connecting into Abu Dhabi.
This deal clearly comes as a shot in the arm for the airline, where things were pretty bad past few months due to the debt situation. This also means a new business model will come into place with respect to the international flights, something I am keenly tracking.
Watch this space for more, and I am happy that my favourite Indian airline finally got a quality investor! I am finally hoping there will b be a Etihad/Jet Airways lounge at Mumbai & Delhi airports, something that has been missing for aeons since Jet Airways became an international carrier.
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Posted by Live From A Lounge |
Tags: 9W, Etihad, Etihad Guest, EY, Jet Airways, Jet Privilege
Etihad is sending out targeted mailers to members of its Etihad Guest program, which offers double miles for those flying on Etihad flights before 30th May 2013 in their Coral Economy Class. This promotion, for those who receive it, is valid for tickets booked online, via the call center or via a travel agent as well.
The promotion terms & conditions do mention that:
This offer is exclusive to a select segment of Etihad Guests, and is available by invitation only.
Bonus Miles Promotion is valid for bookings made between 21 April and 26 May 2013 for travel between 22 April and 30 May 2013.
Promotion is valid only for travel in Coral Economy Class.
The bonus miles earned will depend on the fare class booked.
The bonus miles will be offered only on Etihad operated flights and not redemption flights.
The bonus miles will be credited for every eligible segment flown during the promotion period.
The bonus miles earned will be Etihad Guest Miles and not Tier Miles.
The bonus miles will be credited at the end of the promotion period.
This offer is not valid for SuperSeller members.
While I usually do find a lot of promotions for business class fares, this is one of the rare times I am seeing a promotion offering double miles on economy class. If you’ve got the mail (check your spam folders) and you have a travel plan, you might want to use this!
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Tags: Bonus miles, Etihad, Etihad Guest, EY, Promo
