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Indian carriers in merger talks

Jet Airways is in talks that could lead to the acquisition of rival carrier Air Sahara in a deal that would represent the first consolidation in the fast-changing Indian market.

Jet, India’s largest privately owned airline, has confirmed to the Bombay stock exchange that “discussions are in progress”. Confirmation of the talks followed widespread reports that a deal was imminent that would see Jet forging some sort of alliance with Air Sahara or taking it over outright.

Delhi-based Air Sahara, which is owned by the Sahara Group conglomerate, has been on the market for some time as it needs cash to expand, although Mumbai-based Jet denied in October any interest in buying it. Recently launched Kingfisher Airlines was considered a front-runner in the bidding but it says it has withdrawn its offer as the asking price was too high.

Jet and Air Sahara have domestic market shares estimated at around 43% and 12%, respectively. Both have extensive domestic networks and limited international operations. Many industry observers have been predicting that there will be consolidation in the Indian market, where several new airlines have launched services over the past two years. Jet and Air Sahara both launched operations in the early 1990s. ■

Nicholas Ionides / Singapore

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