Jet, Deccan shares may soar on 'oligopoly'

Mumbai: Mergers and buyouts are ending cut-throat airline competition in India, and with it the Re 1 ticket wars that lost the industry $500 million last year, according to a report on the website of Bloomberg.
The carriers say rising fares will boost profits in an aviation market set to be the world's fastest-growing through 2025 after Jet Airways, the biggest domestic airline, bought Air Sahara and UB Holdings acquired a stake in Deccan Aviation.
"Consolidation is a very positive sign," said Robert Kalin who manages about 500 million euros ($687 million) of Indian stocks at DWS Investment GmbH in Frankfurt. "In an oligopoly, there is pretty good pricing power."
Shares of Mumbai-based Jet Airways have gained more than 30% since it agreed to buy Air Sahara in April. The shares may rise another 25% by December, according to Peter Negline, an analyst at JPMorgan & Chase Co. in Hong Kong.
Shares of Bangalore-based Deccan have risen more than 50% since early April including an 8% gain since UB Holdings, the parent of Kingfisher Airlines, agreed to buy a 26% stake in the carrier in May.
11/07/07 Business Standard

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Categories: Air Deccan Jul 2007, Jet Airways Jul 2007