Bailout a blessing in disguise for Kingfisher

New Delhi/Mumbai: Although a merger with low-cost carrier SpiceJet would have made the Kingfisher-Deccan combine the largest carrier in Indian skies, it would have put a huge burden on the Vijay Mallya-controlled carrier's financials, feel experts.
Also, experts say, with the Kingfisher-Deccan merger being under government scrutiny, regulatory issues could have stymied any attempts made by Kingfisher to merge with SpiceJet.
SpiceJet's losses have almost doubled to Rs 133 crore this year - of which Rs 123 crore were incurred in the March quarter - as compared with last year. According to figures released by the civil aviation ministry for June, the Kingfisher-Deccan combine commanded a market share of 29 per cent as compared with Jet-Jetlite's market share of 29.1 per cent.
A merger with SpiceJet would have left Jet-JetLite more than 10 percentage points behind Kingfisher-Deccan-Spice, which would have had a combined market share of 39.8 per cent.
The merger would also have given Kingfisher a fleet of 98 aircraft, comprising of Airbuses, ATRs and Boeings, bringing it virtually at par with that of Jet Airways.
16/07/08 Anirban Chowdhury & Manisha Singhal/Business Standard

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Categories: Kingfisher Jul 2008