October 14, 2008

Jet Airways, Kingfisher Form Alliance to Reduce Costs

Jet Airways and Kingfisher Airlines have signed an agreement for the formation of an alliance of wide-ranging proportions that will help both carriers to significantly rationalize and reduce costs and provide improved standards of service and a wider choice of air travel options to consumers with immediate effect.

The scope of the alliance includes codeshares on both domestic and international flights subject to the Indian Directorate General of Civil Aviation (DGCA) approval, interline/special prorate agreements to leverage the joint network deploying 189 aircraft offering 927 domestic and 82 international flights daily, and joint fuel management to reduce fuel expenses.

The scope of the alliance also includes cross selling of flight inventories using the common global distribution system platform, joint network rationalization and synergies, cross utilization of crew on similar aircraft types and commonality of training as also of the technical resources, subject to DGCA approval, and reciprocity in Jet Privilege and King Club frequent flier programs.

The two airlines are expected to be able to rationalize their operations and derive the maximum synergies and thereby offer the best possible fares for the benefit of the consumers. However, there will not be any mutual equity investments between the two companies.

Naresh Goyal, chairman of Jet Airways, said: "All over the world airlines have formed alliances in order to become more efficient, improve revenues and provide seamless travel opportunities for their customers. In this environment the Jet AirwaysKingfisher alliance represents a completely new industrial model for aviation in India which would be based on an unprecedented depth of cooperation between the two companies."