Sunday, September 23, 2007

Belgium's new national airline: Jet Airways

Thanks to some good old mismanagement and corruption, Sabena, Belgium's national airline, stopped existing in 2001. Leaving Belgium with no major airline flying international routes.Thus making Belgium a rare 1st world country with full fledged national carrier.

Along comes ever expanding JetAirways fueled by massive demand from India and manages to make Brussels it's European hub. A first by any airline from Asia. From here JetAirways will send flights to all over India: Bombay, Delhi, Bangalore, Hyderabad, Chennai, etc and will also connect major cities in North America New York, Toronto, Chicago, San Francisco, etc.

Further Jet Airways forges a tight alliance with Brussels low cost carrier, Brussels Airways, which flies all over Europe. Creating a perfect hub and spoke system for connecting all of Europe with 2 important regions: India & North America.

This gives Jet Airways the same power as a European national carrier like Lufthansa or Swiss Air or KLM. Truly remarkable because all over the world the airline industry is highly protected and international airlines cannot set up a base. The commercial implications of this for Jet Airways can't be imagined and will be felt very deep into the future. Jet Airways, Indian government and Indian business will be able to capatalise on this in many ways and Belgium is sure to become India's beachhead into Europe.

I would even argue that Jet Airways is better positioned than Lufthansa or KLM to reap benefits from having a European hub, because Brussels has fantastic train connections to London (under 2hrs by Eurostar) and air connections into Africa where the French and Belgians were active colonists.

To begin to understand this, one has to look at the numbers. To start with, by Dec 07, Jet Airways will operate 10 flights a day from Brussels. This will soon be stepped up to 35 flights a day. Brussels Airways operates over 90 destinations out of Brussels which are now tightly connected into Jet's flights. Simultaneously, Jet Airways is making arrangements to operate daily flights from Brussels to Shanghai, Dhaka & other Asian destinations. When those come through, its going to be even more flights out of Brussels. The target is to soon handle 1 million passengers and 60,000 tons of cargo out of Brussels.

How much can Jet Airways grow from here? Last year Lufthansa handled 55M passengers and in 2008 this will go upto 60M. There is absolutely no reason why Jet Airways cannot grow into an airline of Lufthansa's size, especially since it now has 2 hubs: India & Belgium, something which even mighty Lufthansa does not have.

There is one small problem: Belgium may break up into 2 states as the Dutch and French speaking population can't seem to get along. This will cause all kinds of economic difficulties for Belgium and may cause Jet's careful plans to spin out of control.

1 comment:

Aditya's Dad said...

Jet Airways aspires to go global but is not willing to have the same global respct for human life?

Our little baby died on board the airplane and what does Jet Airways do? http://www.adityamohan.com 

Nothing to even investigate!