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Kingfisher and Jet announce alliance

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[Cross Posted from my aviation blog]

Kingfisher and Jet announce alliance

Dr. Vijay Mallya and Mr. Naresh Goyal have just announced an alliance between Kingfisher Airlines and Jet Airways.

They announced only rough contours using very broad strokes. Details are awaited. At this point, no equity investment will be made.

The alliance will include synergies in routes, sharing ground handling and infrastructure, cross-selling of seats, code shares, crews, and frequent flier programs.

A coordination panel, comprising officers of the two airlines, has been formed, to work out the details, towards the goals of the alliance.

CNBC-TV18 reports that Kingfisher has suspended its US operations.

Both airlines are still in the midst of their own mergers. Jet of Air Sahara (now Jet Lite), and Kingfisher of Air Deccan (now Kingfisher Red).

There are concerns of cartelisation given these two airlines control over 60% market share, and the lack of any aviation regulator in India.

Only time will tell. But for now, the advantage is clearly with Jet Airways.

 

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kbsyed61's picture

What's the impact of this synergy?

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104 users have liked.

What would be the impact of this synergy? Isn't this a monopoly coup from free enterprise corporate economy?

http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=HomePage&id=666c1f55-18f8-41b9-a262-0b0e9945011d&&Headline=Jet-Kingfisher+alliance+may+lead+to+airfares+hike

Syed

narayan82's picture

Jets Layoff and the threat...

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91 users have liked.
Jet today laid off 850 employees. A predictable move in an industry going at a 10,000 crore loss. This merger, and its following acts is quite expected seeing the amount of loss the airlines are undergoing. The airports too are going to feel the pinch. less the planes that fly between airports, less the landing fees income and less people that fly less the UDF income. How BIAL will react to this situation is quite uncertain. Would phase 2 be taken slower? If Jet and KF are stalling and cutting down international flights, BIAL is going feel the pinch too. So what is the solution? Is the govt. going to back down and lower the ATF taxes and landing charges? Will this be a fall of the private airlines similar to Damania, modiluft and others? Whatever it is, one this is clear. As a country we cannot be dependant on one form of transport. Trains are always over booked, busses run under monopolies, or on bad roads, the aviation sector is falling apart, - i hope we can find osme way of having a sustainable transport form. I again propose that these forms of transport be interwoven, hence share the profits and share the losses.
Narayan Gopalan
User Interaction Designer
Bangalore
Naveen's picture

Railways are the way out of this

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101 users have liked.

Narayan,

You are absolutely right.

One wonders why in a country with millions of travellers, the aviation sector for inter-city travel is getting so much attention for the very small percentage that it caters to whilst railways continue to languish as the poor man's mode of travel, with poor facilities. Although high-quality trains & buses are now in opertaion, they operate from dirty surroundings & with poor terminal infrastructure.

If the Indian Railways could provide quality trains & fast travel, obviously this would be the answer, but one is greeted with unclean coaches & dirty stations, that puts off the quality-seeking passengers.

Perhaps it would be best to segregate the class of travellers by providing fast /non-stop trains & buses commencing & terminating from better equipped & cleaner platforms for the well off at higher fares, whilst also continuing the low-cost trains to assist the poor & for those that are not so fortunate.

This was bound to happen in a market that is highly price sensitive. Low-cost airline/s might have sounded like a great idea, but they share the same high-cost infrastructure & fuel costs as the high-cost carriers. Thus, at some stage, they were doomed to fail - & pull down all others with them.

The central govt should take steps to segregate the various class of travellers - only such moves will succeed as the income levels across various sections vary considerably & the long-held belief that 'one class fits all' is outdated now.

I believe that the railways are the answer to this as they can carry huge numbers at very low rates of pollution & at lesser per-capital cost than buses on roads.

A National Transport Policy, similar to the National Urban Transport Policy is needed to provide guidelines to the various branches of the Railways in this regard.

 

Devesh's picture

Blood letting continues at Jet Airways and Kingfisher Airlines

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118 users have liked.

Blood letting continues at Jet Airways and Kingfisher Airlines

Cross posted from my blog

The blood letting in the Indian aviation industry shows no signs of stopping.

After the much publicised sacking of 850 cabin crew early on October 15, Jet Airways announced the retrenchment of another 1,050 staff, which also includes flight crews. News reports indicate that another 1,000 jobs will be cut by the end of this year.

That will bring down the workforce at Jet by 23% from 13,000 to 10,000.

The retrenchments are not limited to people. Jet is returning 7 aircraft to its lessors, and its alliance partner Kingfisher is doing the same. Readers will recall, Kingfisher laid off about 300 employees less than a month ago. Observing the reaction to the Jet layoffs, they have decided to defer their layoffs for some time.

Private airlines really have no choice. Unlike, the over-bloated NACIL (Air India and Indian) who have a sugar daddy called the Government of India, whom they have already approached for another bailout of Rs. 2,000 Crore ($440 million), private airlines are at the mercy of the market.

The $ 6 billion Indian aviation industry is facing losses of over 33% this year. An over greedy populist fuel policy of the Union and State Governments, and their controlled Oil Marketing Companies (OMCs), ensure that Indian airlines pay double the price for fuel when compared to the international market. (Read my previous article "Fuel Populism killing Indian aviation").

Not that any of the airlines are themselves are blameless. Following a herd mentality, they rushed in and expanded blindly when oil prices were low. Following a ridiculous policy of trying to compete with the Indian Railways, they had absolutely no contingency plans when they were hit by the "Perfect Storm", of diminishing demand and rising fuel prices.


Governments who are facing elections next year, have resorted to their age old tactics of populism on a grand scale. Thanks to the pay commission increase and farm loan waiver, just two of the many multi-billion dollar expenditure sprees, meant to "help get the votes", the Finance Ministry has no manoeuvring room to accommodate the desperate and logical demands of both airlines and the Ministry of Civil Aviation to reduce the tax rates to a reasonable rate of 4%, uniformly across the nation.

The global meltdown of stock markets have not spared India either, forcing the Government to deploy what few resources are left to rescue the nation. Neither the public, nor the government, has the time, resources, or inclination to bail out the airlines.

The optimistic predictions by both Boeing and Airbus about the tremendous growth in India driving demand for their aircraft has hit ground reality with a thud. Officials of both manufacturers, are reportedly "concerned" about the near term outlook.

Airport operators across India, are facing a crisis. The need to recoup their investments and for that they need to fees. Airlines are major customers and cannot be touched. So the axe falls on you and me, the individual passenger to shell out "User Development Fee", which further increases travel costs and drives passengers from the air to the trains, buses and cars.


All I can say is, "Stay Tuned, the worst is yet to come".

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Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

 

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Regards
Devesh
Bangalore Aviation
Enjoy life, destroy FUD
kbsyed61's picture

Is it a monopoly coup?

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102 users have liked.
Devesh, You are right. We are into rough times and not to be surprised with still more sad news. I would be interested to know the stand of industry and business chambers on this latest developments? More importantly from our Industry captains? Isn't this a monopoly coup from private corporates under free economy?
narayan82's picture

well...

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108 users have liked.
Well Jet just took all its staff back! Read this : http://timesofindia.indiatimes.com/Jet_says_sorry_takes_back_all_sacked_staff/articleshow/3605522.cms As Naresh said he coundn'r bear to see tears in thier eyes. Which, reminds of the stories about young indian pilots taking loans to get thier licences and young women queing up to places like AHA and Frankfin after exhausting thier savings!
Narayan Gopalan
User Interaction Designer
Bangalore
Devesh's picture

Jet-KF articles

ಮೇಲೆ
117 users have liked.

 

I am facing terrible problems with this crazy plain text version of Praja, even after changing my setting. So I am posting many articles on my blog itself. I beg someone from Praja to please copy and cross post.

-----------------------

Regards

Devesh R. Agarwal

Visit my aviation blog at http://aviation.deveshagarwal.com

 

-----------------------
Regards
Devesh
Bangalore Aviation
Enjoy life, destroy FUD

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