labels: Jet Airways, Kingfisher Airlines, News reports, Aerospace manufacturing, Airbus
Jet-Kingfisher tie-up good for both carriers, says Airbus news
17 October 2008

Hyderabad: A partnership of the sorts that private Indian carriers Jet Airways and Kingfisher Airlines are announcing will strengthen them both, according to European aircraft manufacturer Airbus.

John Leahy, chief operating officer of the company said that the alliance between Jet and Kingfisher would create consolidation in the industry, which would make the carriers stronger and more substantial.

He said Airbus was please with its partnership with Vijay Mallya in Kingfisher, and thought that he has the ideal showcase for the products Airbus has been flying. Leahy said that they view it as ''one of the best products of the world in terms of its business class service".

Earlier this week, Jet Airways and Kingfisher Airlines has announced an alliance that would cut costs through code-sharing, sharing of ticketing, ground services, fuel management, crew training and utilisation.

Both airlines had acquired rivals in 2007, and had been erstwhile competitors for the number one spot in the booming Indian aviation industry. Jet had acquired Air Sahara and rebranded it JetLite, while Kingfisher acquired low-cost carrier Deccan Aviation and rebranded it Kingfisher Red.

However, in 2008, combating higher fuel prices most airlines revised their ticket rates upwards, and coupled with a slowing economy, suffered from the consequential slowing in demand. That put pressure on the airlines to evaluate formerly unthinkable alliances to cut costs and trim capacity, including shutting down loss-making routes, while trying to raise funds to stay afloat.

Jet Airways said Wednesday that 1,900 of the airline's13,000 staff were being given termination notices. The number has more than doubled from the 850 announced yesterday. The move by India's largest private carrier to jettison staff at such massive levels has been initiated almost immediately after arriving at an understanding with rival Kingfisher Airlines over operational synergies.

After affecting the largest lay off ever in Indian aviation history, Jet Airways staged a complete about turn reversing its decision to sack 1,900 employees. The decision was announced by chairman Naresh Goyal at a hastily convened press conference at the company's Mumbai headquarters at around 11.30 pm last night. (See: Jet Airways does a U-turn asks sacked staff to resume duties)

The projected losses for the Indian aviation industry are around $1.5 to $2 billion, on revenues of around $6 billion for the current fiscal that ends in March 2009.

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Jet-Kingfisher tie-up good for both carriers, says Airbus