Jet rivals breathe easy

Mumbai: Low-cost carriers aren’t squealing in alarm over the Jet Airways’ buyout of Air Sahara. Fifteen months ago, when the two airlines had crafted a merger deal, there was a squawk of protest and a quick huddle to form a forum that would lobby the government against clearances for the merger. Not this time.
Low-cost carriers have carved out a niche and large market shares and don’t fear a Jet-Sahara combination as they once did.
Air Deccan’s G.R. Gopinath reckons that in the next eight to 10 months, his low-cost airline will grab greater market share than Jet Airways.
The low-cost carriers are happy that the merger will force a rationalisation of the price discounts in the industry.
“The airline (Air Sahara) was selling low fares and undercutting no-frills carriers despite having high costs. As Jet Airways will now be answerable to its shareholders, this could come to an end,” said Ajay Singh, director of SpiceJet.
At present, Air Deccan is the second largest private airline after Jet Airways in terms of market share.
When Jet Airways first announced its intention to buy out Air Sahara, the combined market share of both the airlines was put at over 50 per cent. This was another factor that worried its rivals. However, in this calendar year, the combined market of these two airlines is now just over 32 per cent.
12/04/07 The Telegraph

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Categories: Air Sahara Apr 2007, General Aviation Apr 2007, Jet Airways Apr 2007