Air Sahara back in the group

22 June 2006

The Sahara group on Thursday took effective control of Air Sahara after Jet Airways' Rs2,300-crore acquision bid collapsed yesterday, more than five months after the deal was announced. Air Sahara started operations on its own from most major airports in the country today, airline sources said.

There was no formal announcement from Jet Airways after a one-line communiqué to the media, yesterday stating, "Jet Airways wishes to clarify that it is still awaiting all the regulatory approvals and the fulfillment of all conditions precedent."

While Air Sahara filed a caveat in the Lucknow Bench of the Allahabad High Court to guard against any ex-parte hearing or order in the case, Jet said it is appearing before the Lucknow district court as the lower court is hearing the case now.

Top brass of the two airlines is engaged in legal consultations to deal with the cases filed in Mumbai and Lucknow courts and to minimise damage.

The Rs2,300 crore ($500-million) deal, once materialised, would have created India's largest airline, combining Jet's 35-per cent market share and Sahara's nine per cent. But it fell through due to a combination of procedural delays and disagreements between the two airlines.

The immediate trigger for the collapse of the deal was the government's failure to give Jet Airways chief Naresh Goyal security clearance to join the board of Air Sahara. The directorate general of civil aviation had granted clearance to four other directors of Jet Airways to join Sahara's board.