Kingfisher, Jet Airways in tie-up talks
13 Oct 2008
Kingfisher Airlines and Jet Airways are likely to announce a major tie-up in domestic and international routes amidst a major slump in aviation industry prompting cancellation of some services in important routes.
Jet Airways chairman Naresh Goyal and Kingfisher Airlines owner Vijay Mallya held closed door meeting. Both met at Jet Airways headquarters in Mumbai.
The two are expected to use synergies in sales, ground handling and yield management. The sales and marketing teams of Jet Airways will work with Kingfisher.
Kingfisher Airlines had to suspended US services which was launched with great fanfare some times ago.
Industry analysts see the tie-up as a precursor to a possible merger between the two companies in future.
Both Kingfisher and Jet Airways have been looking to raise raising overseas funds. Kingfisher had plans to raise $400 million while Jet Airways was looking at raising $800 million via rights issues and qualified institutional placements.
The rights issue has been on hold for a year now and the Federation of Indian Airlines had approached the government for a $1 billion bailout package.
Kingfisher Airlines, which last year acquired Air Deccan, the leading operator in the national sector, in the biggest ever merger in aviation Industry, is likely to close its international operations and go for a code share with Jet Airways.
Jet Airways already has a higher market share whereas Kingfisher along with Kingfisher Red has a lower share. Jet Airways is also better off in revenue terms.