Jet Airways, India’s largest private sector airline, on Thursday acquired 100% stake in rival Air Sahara for $500 million (2,300 crore). The deal will make Jet the country’s largest airline in size and market share, overtaking public carrier Indian Airlines.
While Jet’s existing fleet of 53 aircraft will go up to 76, its current marketshare of 37% would grow to nearly 49%. Its nearest competitor is Indian Airlines with a market share of 30%.
The deal is subject to regulatory approvals, expected in 6-8 weeks according to industry sources, till which time both the airlines will operate as independent entities.
Announcing the deal in Mumbai, Jet Chairman, Naresh Goyal said, “The deal would be funded through Jet’s own resources.”
The deal would catapult Jet Airways to among the top 50 airlines in the world, according to industry observers. According to a survey done by Reed Business magazine, Jet Airways is currently ranked 72 among the top 150 airlines in the world, while Sahara doesn’t even figure in the elite list.
On the plus side, Jet, which has been facing problems getting landing rights in the US, where a company has accused Jet of receiving terrorist funding, could use Sahara as a proxy to fly to that country. Air Sahara, currently has a code-share agreement with American Airlines and has recently started flights between Delhi and Chicago. The agreement, may, now have to be relooked and renegotiated. “We’ll start a dialogue with American Airlines soon,” Air Sahara vice president Alok Sharma said.
Jet also made it clear it has no intention of converting Sahara into a low-cost carrier. The acquisition news pushed up Jet stock by 1.88% to Rs 1,149.90.
While Jet’s existing fleet of 53 aircraft will go up to 76, its current marketshare of 37% would grow to nearly 49%. Its nearest competitor is Indian Airlines with a market share of 30%.
The deal is subject to regulatory approvals, expected in 6-8 weeks according to industry sources, till which time both the airlines will operate as independent entities.
Announcing the deal in Mumbai, Jet Chairman, Naresh Goyal said, “The deal would be funded through Jet’s own resources.”
The deal would catapult Jet Airways to among the top 50 airlines in the world, according to industry observers. According to a survey done by Reed Business magazine, Jet Airways is currently ranked 72 among the top 150 airlines in the world, while Sahara doesn’t even figure in the elite list.
On the plus side, Jet, which has been facing problems getting landing rights in the US, where a company has accused Jet of receiving terrorist funding, could use Sahara as a proxy to fly to that country. Air Sahara, currently has a code-share agreement with American Airlines and has recently started flights between Delhi and Chicago. The agreement, may, now have to be relooked and renegotiated. “We’ll start a dialogue with American Airlines soon,” Air Sahara vice president Alok Sharma said.
Jet also made it clear it has no intention of converting Sahara into a low-cost carrier. The acquisition news pushed up Jet stock by 1.88% to Rs 1,149.90.