Jet Airways acquires Air Sahara in the biggest deal in Indian aviation history |
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Fri, 20 Jan 2006 02:15
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NEW DELHI, India - The Indian aviation sector was abuzz with activity today as Jet Airways completed a $500 million acquisition of Air Sahara. This deal makes Jet the biggest airline in the Indian skies, where there has been an explosion of interest since four new airlines were launched last year.
Analysts feel that in the face of such activity, it was inevitable that there would be major consolidation and that the Jet-Sahara deal was but a first step in this direction. "It will give us economies of scale, our cost of operations will go down, and revenues and profitability will go up," Naresh Goyal, the chairman of Jet Airways told at a televised news conference. "What we are really getting is parking slots, airport facilities, infrastructure and the fleet. We will also absorb the pilots [since] we have a shortage of pilots, and cabin crew based on merit."
He was referring to the agreement between Sahara and British Airways PLC, under which the former had seven parking slots at Heathrow as well as the code-share agreement with American Airlines, under which Sahara could operate daily between New Delhi and Chicago. "We have looked at it from a serious business point of view, not from an emotional point of view," Goyal said. He added that the Sahara brand would be replaced by the Jet one in due course of time. Last week, Sahara had refuted reports that it was selling out to Jet and had only admitted that it was looking for strategic alliances.
Meanwhile, Sahara group chairman Subrata Roy has stated that the company would offer alternate arrangement to Air Sahara staff who were unable to adjust at Jet, "If the employees find it difficult to work under the new management, Sahara India Pariwar, in the spirit of true pariwar (family), shall be responsive to any of their genuine difficulties and would take all steps to mitigate their difficulties," he said in an internal communication to employees.
"If the workers wish to come back to Sahara or the assignment is terminated, they will be given suitable job responsibilities in any of the entities of the group, commensurate with their skill sets."
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