When Airline Business Asia-Pacific editor Nicholas Ionides interviewed Naresh Goyal late last year, the ebullient founding chairman of Jet Airways stressed that while he is expanding fast overseas, the focus is still very much on the Indian domestic market.
With last week’s announcement to the Bombay Stock Exchange that Jet is to buy domestic rival Air Sahara his comments are borne out. “I don’t want to make the mistakes that a lot of US carriers and other major carriers worldwide have made and gone international while neglecting the domestic,” Goyal told Airline Business. “Our focus must remain on domestic. This is our largest market and it is growing at 25% per year. That is the bottom line.”
A combination of Jet and Air Sahara will be the first airline consolidation in India and is expected to be far from the last. They are India’s largest privately owned carriers and will make a powerful team, bringing together Jet’s estimated 40% domestic market share with Air Sahara’s 10%.
The price for Air Sahara will not be cheap: Jet says around $500 million. But the chance to cement Jet’s already strong domestic position at a time when Air-India and Indian Airlines have still to become tough and agile competitors, and when the rash of new low-cost start-ups are only just establishing themselves, looks like another sage piece of business by the wily Goyal.
Moreover, the landing and take-off slots that go with an Air Sahara takeover, considering the airport capacity crunch in India, are also gold dust.
Goyal’s focus may be on domestic expansion, but he is also excited about Jet’s significant growth potential on international routes.
The Air Sahara deal, if closed, could be a critical springboard for the ambitions of this emerging Indian force.