Kingfisher, Jet in cost-saving alliance

Rival private airlines Jet Airways and Kingfisher Airlines, with a collective market share of over 58 per cent, announced a strategic alliance to help them reduce cost and enhance efficiency.

The alliance, announced in a late night press conference, will involve code-sharing on domestic and international flights, an interline agreement, joint fuel management, common ground-handling services and cross-selling flights through the global ticketing system.

The two have also agreed to cross-utilise crew on similar aircraft types and use common training facilities. Passengers can also use frequent flyer programmes by flying in either of the airlines.

The two companies, however, clarified that there will be no equity investment in each other’s company. A formal merger of the two airlines would not have been possible because the country’s competition laws mandate that airline companies cannot have a market share of over 40 per cent after they merge. Jet Airways shares jumped by 10 per cent and Kingfisher 28 per cent today, ahead of news of the impending alliance.

Source: Business Standard

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