Merger of rivals lifts airline spirits

Bangalore: There’s a glimmer of hope for the aviation industry in the marriage of rival carriers Kingfisher and Jet.
M Thiagarajan, managing director, Paramount Airways, said, “It is very positive for the industry. We will see a lot of capacity moving out of the industry due to the fleet rationalisation and route optimisation by the two airlines. This would make the benchmark fares go up, which would be good for all of us.”
Thiagarajan believes the alliance is an attempt to correct the current air fares, which are 25-30% below cost.
Kapil Kaul, CEO, Centre for Asia Pacific Aviation (CAPA), said the industry was currently saddled with 30% excess capacity and the Jet-Kingfisher pact could slash 15% of the excess capacity.
Air traffic in the domestic sector has moved up 0.7% till September this year, while capacity for the whole year is expected to go up by 14%.
Ankur Bhatia managing director of Amadeus is sceptical of the pact. “How can there be collaboration between two competing airlines? These guys own different aircraft fleet. The only thing I see happening is Kingfisher using Jet’s international services and Jet taking advantage of Kingfisher’s network in the country,” said Bhatia.
15/10/08 Praveena Sharma/DNA MONEY/Sify

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Categories: Indian Aviation- In General Oct 2008, Jet Airways Oct 2008, Kingfisher Oct 2008