‘Jet-Kingfisher pact could lead to regional alliance’

October 16th, 2008 - 2:01 pm ICT by IANS  

KPMGNew Delhi, Oct 16 (IANS) The strategic alliance between Jet Airways and Kingfisher, aimed at reducing cost and enhancing capacity utilisation, could see more carriers in the region joining them, experts say.The alliance will be on the lines of Star, SkyTeam and Oneworld, all global aviation alliances, but the experts said it would be more of a regional alliance.

“It would be a regional alliance of airlines of South Asian countries and even the flagship carrier (Air India) could be part of it as it would be in its interest too,” Marc Martin, senior adviser on aviation for global consultancy KPMG, told IANS.

Added aviation expert Gurcharan Bhatura: “South Asia has tremendous scope of expansion in the aviation sector. We can have all big airlines sharing services in the region.”

Bhatura, who heads the autonomous think tank Foundation for Aviation and Sustainable Tourism (FAST), expected more such alliances in future. “It would be a desperate move by airlines to cut losses.”

But the executive director and spokesperson of Air India, Jitendra Bhargava, said it was unlikely that a new regional alliance would emerge. “I don’t see it happening, and even if it does, Air India is already part of Star Alliance,” Bhargava told IANS.

The Jet-Kingfisher alliance announced Monday night involves code-sharing on both domestic and international routes, rationalisation of routes, joint fuel management, common ground-handling, and cross-selling flights through the global ticketing system.

Jet and Kingfisher are not associated with any of the three big multilateral global aviation alliances, but have code sharing arrangements with a few foreign carriers.

The new strategic alliance between Jet and Kingfisher has created a collective market share of over 58 percent, while Air India accounts for only about 18.4 percent.

India’s flagship carrier was expected to integrate with Star Alliance by next March. But airline officials said it may take longer because of internal dynamics - the carrier is going through restructuring and integration and changing its profile.

Star Alliance is a club of 21 international airlines and has Lufthansa, Singapore Airlines and US Airways, among others, as members.

This is followed by OneWorld, an alliance of 10 airlines that includes American Airlines, British Airways, Qantas and Finnair. SkyTeam constitutes 11 carriers members including Air France and Delta.

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