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Jet Airways has tied up with Air France-KLM (AF-KLM) to capture a larger pie of India's global traffic but will not divorce its ties with equity partner Etihad.

Jet Airtways said it has signed a new agreement with Europe-based Air France-KLM that will increase the coverage and capacity of its existing agreement with the airline.

Jet shares were trading 1.7 percent higher on Wednesday, while Air France-KLM shares were up 1 percent. The agreement involves sharing revenue on India- Europe routes on metal neutrality basis.

In 12 months until September, over 58 million passengers flew to and from India, and almost half of them travelled via hubs outside India. In Europe, London and Frankfurt take the top positions.

Air France-KLM (OTCMKTS:AFLYY) was upgraded by stock analysts at J P Morgan Chase & Co from an "underweight" rating to a "hold" rating in a research report issued on Monday, November 20th.

"This agreement strengthens the partnership built between these airlines since 2014 and expanded in 2016 with an extensive code-share agreement for connections between Europe and North America and Jet Airways' hubs in Mumbai and New Delhi via Air France-KLM's hubs in Charles de Gaulle airport of Paris and Amsterdam-Schiphol", the carriers said. We've a great relationship with Etihad, which will continue and will not be disturbed at all", he said, "We've done well with Etihad and will continue to do so.

Jet has joined hands with KLM to boost its long-haul operations.

The extended agreement will create a combined network covering 106 destinations in Europe and 44 Indian cities.

"We are innovating within the airline industry by offering connections between two partnerships for the first time: our enhanced co-operation agreement for India-Europe with Jet Airways and the Air France-KLM and Delta Air Lines' Europe-North American joint venture".

At the moment, AF-KLM is not planning an equity investment in Jet Airways.

The Nov. 29 agreement is created to strengthen the partnership between the three airlines that has been in force since 2014. The partnership, Goyal said, is expecting an incremental revenue to the tune of $1 billion.

The goal is to achieve 1.7 million passengers in 2018, almost 40 percent of increase. "Also, our partner Etihad has no intention to exit Jet", Goyal had said on September 11. The two airlines also signed a memorandum of understanding to further tie up in cargo.