Jet-Kingfisher announce mega alliance (Fourth Lead)

October 14th, 2008 - 1:53 am ICT by IANS  

Mumbai, Oct 14 (IANS) India’s biggest private carriers Jet Airways and Kingfisher Airlines late Monday night announced an alliance of wide-ranging proportions that will help both carriers reduce costs, synergise operations and improve services.The alliance will offer “a wider choice of air travel options to consumers with immediate effect. The two airlines will be able to rationalize their operations and derive the maximum synergies and thereby offer the best possible fares for the benefit of the consumers,” Jet Airways chairman Naresh Goyal and his Kingfisher Airlines counterpart Vijay Mallaya said in a joint press statement issued after a marathon meeting here.

There will, however, not be any mutual equity investments between the two companies, the statement added.

“The alliance will also enable a stabilization of the Indian aviation industry in the larger public interest for the benefit of the customer during the current downturn of the world economies,” the statement maintained.

In the current environment of high costs and declining growth this alliance has potential for substantial savings resulting in a benefit to the consumer.

The scope of the alliance will include:

* Code-shares on both domestic and international flights subject to DGCA approval,

* Interline/special prorate agreements to leverage the joint network deploying 189 aircraft and offering 927 domestic and 82 international flights daily,

* Joint fuel management to reduce fuel expenses,

* Common ground handling of the highest quality,

* Cross selling of flight inventories using the common global distribution system platform,

* Joint network rationalization and synergies,

* Cross utilization of crew on similar aircraft types and commonality of training as also of the technical resources, subject to DGCA approval,

* Reciprocity in Jet Privilege and King Club frequent flier programmes.

Commenting on the path-breaking alliance, Goyal said: “All over the world, airlines have formed alliances in order to become more efficient, improve revenues and provide seamless travel opportunities for their customers.

“India has witnessed tremendous growth in the past which has slowed down considerably. In this environment the Jet Airways-Kingfisher alliance represents a completely new industrial model for aviation in India which would be based on an unprecedented depth of cooperation between the two companies.

“There will be huge cost savings and revenue enhancement opportunities arising from this alliance,” Goyal added

Mallya said: “This is a quantum leap forward in the evolution of Indian aviation which will benefit customers by delivering the most comprehensive integration in the industry.

“Both Jet and Kingfisher fully realize that better understanding of supply and demand in this capital and labour intensive industry is the key to profitability and enhancement of shareholder value.

“I look forward to this alliance delivering superior quality, cost savings, flexibility and enhanced consumer value which is the hallmark of all successful alliances,” Mallya added

While maintaining their separate legal entities and brand entities, both Jet and Kingfisher will examine co-branding opportunities and have formed a core committee of senior management personnel from both companies who will drive the various identified initiatives forward with immediate effect under the overall direction of Goyal and Mallya, the joint statement said.

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