Is the Jet-Sahara deal off?

The high profile merger proposal between Jet Airways and Air Sahara to create the largest domestic airline with a dominant market share is reportedly in trouble. Unconfirmed reports indicate that the proposal is facing stiff opposition from various regulatory authorities.

The Director General of Civil Aviation (DGCA), the regulatory body for the domestic aviation industry, has reportedly taken the stand that a merger between two airlines would not mean automatic transfer of landing rights and parking lots at various airports to the merged entity. There are no clearly laid down norms to be followed in the case of a merger between two airlines.

The civil aviation ministry is said to be in favour of the Jet-Sahara deal and says approval would be granted once an application is received from the parties. Curiously, Jet Airways has so far not made an application for approval.

To make matters worse, the Monopolies and Restrictive Trade Practices Commission (MRTPC) has written to both airlines asking for information about the deal when everyone had forgotten about the existence of MRTPC.

Other domestic airlines like Indian (the new name for the old public sector Indian Airlines) and Kingfisher had objected to the Jet-Sahara deal on the grounds that it would create a near monopoly with access to the best airport infrastructure.

The industry also saw the formation of two camps with smaller airlines like Kingfisher and Spicejet teaming up to discuss sharing of airport infrastructure. Air Deccan, the largest low-cost operator, joined hands with the Jet-Sahara alliance for possible business cooperation.