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Etihad Airways wishes to open up Jet Airways' loyalty programme JetPrivilege to other carriers, Business Standard reported. It is currently managed by Jet Privilege Private Limited (JPPL), a subsidiary company in which Etihad owns a majority stake.
Moneycontrol could not independently verify the report.
Under the present regime, JPPL can sell miles to Jet Airways, its 25 partner airlines, banks and hotels, but not to other airlines due to an exclusivity clause. The Gulf airline wants to change this and allow other airlines to become partners.
Industry sources told the paper that Etihad may consider merging the loyalty progamme with its own, but there have been no discussions between the two parties regarding the same yet. Jet Airways pays JPPL for the collection of miles and JPPL pays it back to the carrier when a customer redeems those miles. That cost is decided on a per mile basis and is revised each month.
In October 2018, Jet had sold redemption miles worth $35 million. Etihad CEO Tony Douglas had written to State Bank of India chairman Rajnish Kumar saying that they would support the release of $35 million by JPPL after due diligence is conducted and regulatory approvals are met.
As Etihad is discussing fund infusion in Jet, it is seeking waivers for an open offer and preferential share pricing from Securities and Exchange Board of India (SEBI). Another option on the table is that lenders could convert Jet's debt into equity and give the airline fresh loans.
Jet Airways holds 24 percent stake in JPPL and Etihad holds 50.1 percent. In FY18, JPPL reported a revenue of Rs 622 crore and profit of Rs 177 crore.
An industry source is quoted in the report as saying that with this move, Etihad may be seeking to protect its investment in JPPL and Jet. He added that this could help the programme generate more revenue.
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