Kingfisher-Jet alliance inevitable for survival: Gopinath

October 14th, 2008 - 1:50 am ICT by IANS  

Bangalore, Oct 14 (IANS) The alliance between India’s leading private carriers Kingfisher Airlines and Jet Airways was “inevitable” for their survival and mutual growth, said Captain G.R. Gopinath, vice-chairman of Kingfisher and pioneer of budget airlines in the sub-continent.”I think it is inevitable as it is a matter of survival in these times when airlines the world over are going through their worst phase due to a combination of factors, triggered by soaring fuel prices and followed by global economic slowdown and falling occupancy,” Gopinath told IANS on phone Monday night from the Andamans, where he is holidaying.

Expressing hope that the alliance would enable both the airlines to save huge costs, improve efficiency and facilitate cross-selling, Gopinath said overpricing, rising fuel surcharge and other overheads have resulted in seat occupancy levels declining to about 50 percent in all domestic carriers, leading to heavy operational losses.

“If occupancy levels have fallen to 50 percent in the recent past, it implies the other 50 percent of the people (read customers) cannot afford to fly anymore. Overpricing and increasing fuel surcharge have made all airlines, including Spice, GoAir, IndiGo to fly their aircraft with half the passenger load factor. No airline can sustain or survive at this rate,” Gopinath lamented.

Though Gopinath learnt about the proposed alliance talks between Kingfisher Airlines chairman Vijay Mallya and his Jet Airways counterpart Naresh Goyal earlier in the day, he had expressed reservation about any merger between the two airlines as such a move would require the boards of respective listed firms to decide and seek approval of shareholders.

“Merger is an altogether different issue. In the prevailing situation, such an alliance makes sense and is in line with what has been happening with other/international airlines world over. Indian carriers can no longer remain immune to the impact of global crisis in the aviation industry. I hope it is only a passing phase and the industry will bounce back in a year or two,” Gopinath pointed out.

Endorsing the alliance, Gopinath said rationalisation of routes, code-sharing agreement and operational synergies at various levels spanning marketing, ticketing, ground-handling and activities would help them to bring back customers who have switched to other modes of transport due to overpricing and suspension of flights.

“The need of the hour is to increase the occupancy levels with rational fares and good connectivity. The alliance should help both the airlines to minimise losses and make optimal utilisation of fleet, resources, staff and expertise,” Gopinath added.

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