Jet-Kingfisher alliance fails to take off

New Delhi: Three months after rivals Jet Airways (India) Ltd and Kingfisher Airlines Ltd announced an ambitious operating alliance that would help both cut costs in the background of a slowing economy and slowing business, the airlines seem to be flying their separate ways, according to analysts and government officials.
Both airlines declined comment for this story.
The alliance would have covered at least 800 flights operated every day by the two airlines, but it is far from being executed on the ground or in the air, say analysts and officials at India’s aviation ministry.
On 13 October, Naresh Goyal, the chairman of Jet and Vijay Mallya, the chairman of Kingfisher, said they were coming together to form an alliance given the harsh economic environment and would cooperate under eight specific areas: code-sharing flights, interline agreements, joint fuel management to reduce fuel expenses, common ground-handling, cross-selling of flight inventories, network rationalization, cross-utilization of crew on similar aircraft types and reciprocity in frequent flier programmes to achieve profitability.
Code-sharing refers to a ticket marketing practice among airlines that allows carriers to share codes used in airline reservation systems. On the ground, this helps customers purchase a single ticket on a journey that has two flights such as a New Delhi-Amsterdam one and an Amsterdam-New York one on two different airlines.
The mid-October announcement had raised high expectations, with Goyal calling it a “completely new industrial model for aviation in India which would be based on an unprecedented depth of cooperation between the two companies”. Mallya had said the alliance would “benefit customers by delivering the most comprehensive integration in the industry”.
The alliance, which also meant neither airline needed as many people as it had on the rolls, ran into trouble in its first few days when a plan by Jet Airways to sack 1,900 staffers ran into trouble with high-decibel employee protests and intervention by politicians.
Last week, a senior ministry official said the administration has not been officially informed of any alliance or any efforts jointly planned by the two airlines. “Nothing at all, absolutely nothing,” said M. Madhavan Nambiar, secretary, ministry of civil aviation, when asked if the alliance had sought any permission from the government. “I don’t think they have done anything or they have communicated anything.”
Although it has not progressed on approvals for such arrangements with Kingfisher, Jet Airways has taken aviation regulator director general of civil aviation’s permission for code-sharing flights with its low-fare subsidiary JetLite Ltd. Such permissions were announced on 21 October.
14/01/09 Tarun Shukla/Livemint

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Categories: Jet Airways Jan 2009, Kingfisher Jan 2009