MUMBAI: India’s Jet Airways and Air France-KLM on Wednesday announced a partnership to route more traffic through Europe and on to North America, in a potential challenge to Gulf carrier Etihad Airways which is a shareholder in Jet.
Indian international air traffic is booming, but much of the growth has been captured by the three big Gulf carriers including Etihad, which owns 24 percent of Jet.
The “enhanced cooperation agreement” with Air France-KLM, signed in India’s financial capital Mumbai, is designed to expand the number of flights to Europe and make Paris and Amsterdam hubs for connecting flights to the US.
The agreement also includes Delta Air Lines, with which Air France KLM has an existing partnership.
International carriers are increasingly tying up on routes in the face of rising competition.
Jet’s chief financial officer Amit Agarwal said in September that there was “continued weakness in the Gulf market both on the demand as well as yield.” He said flights into Amsterdam and Paris, which Jet launched recently, were a “brighter spot.”
The Gulf will continue to be an important market and Jet will not reduce its operations there, Naresh Goyal, chairman of Jet, told reporters alongside Jean-Marc Janaillac, Air France-KLM’s chairman. Goyal added that Jet had a “great relationship with Etihad” and that would continue.
Under its previous CEO, James Hogan, Etihad had invested in Jet Airways as part of an aggressive strategy of growing its Abu Dhabi hub by taking stakes in other airlines that would funnel traffic to the UAE.
Two of the airlines, Alitalia and Air Berlin, have since entered administration and incoming Etihad CEO Tony Douglas is expected to re-examine its other equity investments when he starts in January.
Etihad was not immediately available for comment.
CAPA Center for Aviation senior analyst Will Horton said the Air France KLM partnership was a “textbook example” of the downside of Etihad having only a minority investment in Jet.
“Under the new/expanded deal, Jet Airways will do more flying on its own compared to the Etihad deal. That boosts revenue,” he said. “Jet’s widebody fleet will also be better utilized — that’s also good for Jet.”
Jet and Air France-KLM said in a statement the agreement announced on Wednesday would involve coordination of sales and services. They also signed a memorandum of understanding to strengthen cooperation in cargo operations.
Jet shares were trading 1.7 percent higher on Wednesday, while Air France-KLM shares were up 1 percent.
Jet and Air France-KLM expand ties in potential challenge to Etihad
Jet and Air France-KLM expand ties in potential challenge to Etihad
Related
Gulf-EU value chain integration signals shift toward long-term economic partnership: GCC secretary general
RIYADH: Value chains between the Gulf and Europe are poised to become deeper and more resilient as economic ties shift beyond traditional trade toward long-term industrial and investment integration, according to the secretary general of the Gulf Cooperation Council.
Speaking on the sidelines of the World Governments Summit 2026 in Dubai, Jasem Al-Budaiwi said Gulf-European economic relations are shifting from simple commodity trade toward the joint development of sustainable value chains, reflecting a more strategic and lasting partnership.
His remarks were made during a dialogue session titled “The next investment and trade race,” held with Luigi Di Maio, the EU’s special representative for external affairs.
Al-Budaiwi said relations between the GCC and the EU are among the bloc’s most established partnerships, built on decades of institutional collaboration that began with the signing of the 1988 cooperation agreement.
He noted that the deal laid a solid foundation for political and economic dialogue and opened broad avenues for collaboration in trade, investment, and energy, as well as development and education.
The secretary general added that the partnership has undergone a qualitative shift in recent years, particularly following the adoption of the joint action program for the 2022–2027 period and the convening of the Gulf–European summit in Brussels.
Subsequent ministerial meetings, he said, have focused on implementing agreed outcomes, enhancing trade and investment cooperation, improving market access, and supporting supply chains and sustainable development.
According to Al-Budaiwi, merchandise trade between the two sides has reached around $197 billion, positioning the EU as one of the GCC’s most important trading partners.
He also pointed to the continued growth of European foreign direct investment into Gulf countries, which he said reflects the depth of economic interdependence and rising confidence in the Gulf business environment.
Looking ahead, Al-Budaiwi emphasized that the economic transformation across GCC states, driven by ambitious national visions, is creating broad opportunities for expanded cooperation with Europe.
He highlighted clean energy, green hydrogen, and digital transformation, as well as artificial intelligence, smart infrastructure, and cybersecurity, as priority areas for future partnership.
He added that the success of Gulf-European cooperation should not be measured solely by trade volumes or investment flows, but by its ability to evolve into an integrated model based on trust, risk-sharing, and the joint creation of economic value, contributing to stability and growth in the global economy.
GCC–EU plans to build shared value chains look well-timed as trade policy volatility rises.
In recent weeks, Washington’s renewed push over Greenland has been tied to tariff threats against European countries, prompting the EU to keep a €93 billion ($109.7 billion) retaliation package on standby.
At the same time, tighter US sanctions on Iran are increasing compliance risks for energy and shipping-related finance. Meanwhile, the World Trade Organization and UNCTAD warn that higher tariffs and ongoing uncertainty could weaken trade and investment across both regions in 2026.
