After months of uncertainty and financial struggles Indian airline Jet Airways appears to have a new lease on life, even as more aircraft are grounded due to lack of lease payments. The carrier will reportedly see just over $400 million invested by Etihad Airways and the National Investment and Infrastructure Fund of the UAE. A portion of control will also revert to the Indian government via its ownership of the State Bank of India.
The cash buys the UAE and Etihad stakes that increase their combined control to 45% of the carrier. The State Bank took a 32% stake and the Goyal family that founded the carrier will give up 31% of its share, dropping to a 20% ownership position.
Aircraft & Operations
Assuming this funding plan comes to fruition the carrier still faces significant challenges. Jet Airways reported over the weekend that it is up to 23 planes out of service, nearly 20% of its fleet. Another two were reported grounded on Monday.
With these aircraft grounded the company faces cuts in operations as well. FlightStats.com suggests that Jet Airways operated just over 12,000 flights in February 2019, down from a peak over 18,000 in May 2018 and approximately 16,000 in each of the most recent three months.
Read More: SpiceJet set to connect on new 737 MAX fleet
Dropping more than 100 daily flights means displaced passengers and refund or accommodation costs. It also could alienate travelers, pushing them to other airlines in a competitive environment that is terribly unforgiving.
Can inflight wifi connectivity save the day?
While passengers in India have proven fickle with their brand loyalty Jet Airways is betting on an elevated level of service on board to help retain some of its appeal. The carrier announced a deal with Global Eagle in February 2016 to add streaming entertainment on board and quickly rolled out that offering. The deal also includes plans for satellite-based wifi on board. Delivery of that service was delayed, however, owing to regulatory challenges.
Read More: Inflight Internet in India: An Opportunity Overview
With the Indian government finally on board the time has come to deploy the satellite connectivity on these planes. And, even with the financial uncertainty, that effort is expected to begin relatively soon. With the airline finances squared away Global Eagle is ready to push forward, as CEO Josh Marks recently explained to PaxEx.Aero.
We still believe that the conditions in India are right for inflight connectivity. We’re ready to go in terms of our bandwidth, license, and engineering. We just want to make sure that Jet Airways is complete in its internal restructuring efforts and we’ll be ready to proceed.
-Global Eagle CEO Josh Marks
That Global Eagle is prepared with the bandwidth and licensing is impressive progress. The company partnered with Hughes India to secure satellite capacity compliant with the government regulations approved in December 2018. Most critical among the rules, all satellite ground stations must be in India, limiting which satellites are available for service.
And there’s still the question of whether Jet Airways will take a chunk of its newly secured funding and invest it in the financial sinkhole that is the inflight connectivity market. Showing a strong RoI on such spend has proven difficult for most carriers, even in established markets.
Connectivity Competition Coming
Global Eagle might be first to bring an Indian airline online with inflight connectivity, but it is not alone in that race. SITAONAIR issued a report last month highlighting its progress in the market as well. The company expects to meet the satellite ground station requirement “in the coming months” though it does not indicate if this will be with the slower SwiftBroadBand or faster GX Aviation platforms it resells from Inmarsat. The group also notes that its work on the government licensing is in progress.
The airline most likely to benefit from SITAONAIR’s progress is SpiceJet. The carrier announced that it would install GX Aviation on its fleet, though Inmarsat later noted that the contract for that operation was not yet inked. Similar to the Jet Airways arrangement with Global Eagle’s streaming IFE platform, SpiceJet is installing the awkwardly named “SpicEngage” platform, powered by Lufthansa Systems’ BoardConnect, on its fleet. The BoardConnect base platform has shown its flexibility in extending from on-board streaming to satellite connectivity for multiple other airlines. Most recently Indonesia’s Citilink implemented the kit for connectivity.
Looking for a deep dive into the Indian inflight connectivity market? PaxEx Premium offers a 20-page report published in February 2019 with detailed analysis of the technologies, vendors and airlines in the Indian inflight connectivity market. Get your copy here.
Header Image: Jet Airways 737 via Flickr/CC-BY 2.0
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