Kingfisher-Jet merger will impact fliers

Wednesday, October 15, 2008, (New Delhi)
Once bitter rivals, now business partners. So how will this new alliance between Kingfisher and Jet Airways affect the ordinary flier?

Vijay Mallya, chairman, Kingfisher Airlines, says: "Alliance will increase efficiency, cut costs and it will be passed on to the consumer."

From cutting down on the number of flights on the same route to sharing ground resouces and honouring frequent flier miles, the mantra is: cost cutting.

But experts say for ordinary fliers, the alliance means less options.

Jayesh Desai, head of infrastructure division, Ernst & Young, says: "The minimisation of options is going to emerge from this alliance."

Together these two airlines have about 60 per cent of the market share. So will the tie-up lead to monopoly fares?

"You have Indian airlines on one side and LCC on the other side...and they price the way they do. So really there is a limit to which they can influence pricing," says Desai.

By cleaning up the losses, Indian carriers are also hoping to attract foreign investments, but in these times of global financial crisis that will not be easy.

These are difficult times for Indian aviation. Air fares are going, passenger load factor coming down, and every airline is losing money. Unless airlines take some bold steps, carrying on may be difficult.