SpiceJet vetting books of JetLite

Mumbai/Bangalore: Budget airline SpiceJet Ltd is seriously evaluating buying out its rival JetLite. It is currently doing due diligence for any possible acquisition of the low-cost subsidiary of the Jet Airways.
A person close to the development confirmed this to DNA Money, saying, "due diligence is happening but only to check if the airline was worth acquiring or not."
SpiceJet, which had got funding of around $80 million from American investor Wilbur Ross a year back, has been scouting for the right buy for some time as it seeks to consolidate its position in the industry.
"We (SpiceJet) are looking at what synergy exists between the two airlines and whether there is operational compatibility," said a SpiceJet executive, who has been asked to appraise the ground handling facility of JetLite.
Sanjay Aggarwal, CEO, SpiceJet, refused to comment. According to industry sources, JetLite was the best fit for SpiceJet as both airlines have the same fleet -- Boeing 737-800 -- and were operating in the same segment. It would also push up the New Delhi-based airline's market share of 12.8% by 7.3% -- JetLite's share in June as reported by DGCA.
JetLite's fleet consists of 24 aircraft with 17 Boeing 737-800s and seven Canadian Regional Jet-200s (CRJ-200s) while SpiceJet has Boeing 737-800s and 737-900s.
However, JetLite's planes are old, which, an industry expert said, could push up the maintenance of SpiceJet.
Another stumbling block in JetLite's acquisition is Jet's legal tussle with its former owner Sahara India Commercial Corp Ltd over payment of dues. The two parties have approached the Bombay High Court to settle dispute over tax liability of Rs 37 crore.
16/07/09 Archana Shukla & Praveena Sharma/Daily News & Analysis

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Categories: JetLite Jul 2009, New Jul 2009, SpiceJet Jul 2009