Mumbai: Jet Airways (India) Ltd, the country’s second largest airline by passengers carried, is weighing options on maintaining or closing down its only international hub in Brussels, citing economic feasibility in the wake of intense competition and changing dynamics in aviation.
The Naresh Goyal-promoted airline, in which Abu Dhabi’s Etihad Airways PJSC has a 24% stake, has started a consultative process with employee representatives on the future of the international hub, according to two people close to the development who declined to be named.
Jet Airways started using the Belgian capital as a hub in September 2007, when it began flying to Europe, making it the first Indian airline to have full-scale operations outside the country besides state-owned Air India Ltd.
Jet Airways has two hubs in India -- Mumbai and Delhi -- while its equity partner Etihad Airways operates through its hub in Abu Dhabi. At present, Jet Airways is flying via Abu Dhabi hub in partnership with Etihad Airways.
“There is no concrete decision on Brussels hub. It is not that Jet Airways is going to close down the hub. But the airline has started review process on the hub. It may or may not continue with the existing hub system," one of two people said.
At its peak, Jet Airways has operated flights to Brussels from Bengaluru, Mumbai, Delhi and Chennai. The airline has operated flights to Newark, New York and Toronto from Brussels.
However, Jet Airways discontinued Bengaluru - Brussels flights in January 2009 and New York - Brussels in September 2012. Chennai - Brussels flights were discontinued in November 2012.
This was largely owing to the economic slowdown in Europe and Jet Airways’ alliance with Etihad Airways enabling re-routing of flights via Abu Dhabi.
Jet Airways operates daily flights between Brussels and New Delhi and Mumbai in India and Newark and Toronto in North America.
A Jet Airways spokesperson said no specific decision with regard to the Brussels operation has been taken at this time.
“Jet Airways has only initiated a consultative process with its employees’ representatives in Brussels to determine future steps regarding its operations at Brussels Airport. This process is in line with Jet Airways’ approach of engaging with employees in a transparent manner regarding key business decisions and is also fully in compliance with Belgian laws," the spokesperson said.
The spokesperson reiterated that all the existing Jet Airways flights to and from Brussels continue to remain open for sale and travel.
While from an operational standpoint, the gateway was a success, its financial viability has become a challenge primarily due to external factors such as a less favourable global economic climate, especially in Europe, realignment of partnership and alliance structures in Europe and fierce price competition, the spokesperson said.
“Despite difficult economic conditions, Jet Airways stayed committed to the Brussels gateway and adapted to the challenging conditions by a number of restructuring measures. However, due to significant changes in the competitive scenario in Brussels and Europe, the gateway has become economically unviable and unsustainable. Jet Airways may therefore have to evaluate redeploying its assets and services," the spokesperson said.
Ajay Awtaney, a financial services professional and travel writer based in Mumbai, said Jet Airways has been pondering over leaving Brussels for a long time.
He said Jet Airways originally entered Brussels because it got a good deal from Brussels airport, and Brussels Airlines was going to help channelise passengers.
“However, not much success with that support. Also, Brussels is not a preferred destination in Europe for Indians apart from the diamond merchants. Jet Airways is looking to move to Amsterdam, where it can perhaps get into a joint venture with Delta/KLM-Air France to operate the india leg from Amsterdam," Awtaney said.
Awtaney said the move by Jet Airways to review the existence of the Brussels hub might have the blessings of Etihad Airways, which is also close to KLM and Air France.
In January 2013, Mint had reported that Jet Airways will gradually scale down operations at its current international hub of Brussels and move this to Abu Dhabi, citing two people who requested anonymity.