A year on, Jet, Kingfisher fail to fly in formation

Bangalore: In 2008, when full-service carriers Jet Airways and Kingfisher Airlines announced an operational alliance to improve efficiency and profits, it was supposed to change the dynamics of India’s aviation sector.
More than a year after their much-publicised partnership, industry insiders say the two have not been able to move beyond tactical alliance.
What this means is, while they have joined forces in the areas of sharing ground handling services, parts and airport equipments, they have failed to tie up for sharing of routes and customers.
So, what went wrong?
A senior executive with a rival airline, who did not want to be named, said one of the primary reasons is that the two carriers are competitors and their services are not complementary.
“In such a scenario, there is always the question of who gives up what and in which areas. Such alliances, where you need to enter into code-share and interline agreements, to drive cost efficiency can be tricky if you are competitors,” he said.
Some industry experts even blame the absence of “clear-cut policy” for code-sharing between domestic carriers as the reason for the delay in the deal.
“The DGCA (Directorate General of Civil Aviation) has a broad guideline for it (code-sharing policy). So, any approval for code-sharing is arbitrary. When Jet and Kingfisher asked for clearance, the DGCA did not even look into it,” said an airline executive in the know.
He said Jet-Kingfisher alliance also faced opposition from other carriers, who viewed it as an attempt to kill competition in an industry with only a handful of players. “It was seen as a move that would lead to monopolistic practices in the now competitive market.”
The two leading carriers by number passengers carried had said they would cooperate in eight areas that involved code-sharing pacts, interline agreements, jet fuel management, sharing of ground-handling, cross-selling of flight inventories, network rationalisation, cross-utilisation of crew and merging of loyalty schemes.
16/03/10 Praveena Sharma/Daily News & Analysis

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Categories: Jet Airways Mar 2010, Kingfisher Mar 2010