Kingfisher Airlines-Jet Airways announce operational alliance

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Oct. 15 – Its a marriage of convenience. When oil costs are soaring, and air fares are low two of India's largest private airlines have no choice but to form an operational alliance. While Vijay Mallya controlled Kingfisher Airlines and Naresh Goyal owned Jet Airways have not yet decided to merge, the two companies jointly announced that they would form an alliance to cut costs and shore up their bottomline.

The two airlines have a combined fleet size of 186 aircrafts and a control 60 percent of the Indian skies. Indian frequent fliers expect the operational alliance to create a monopoly in the Indian skies, leading to increased air fares. While Jet Aiways has already spread its wings internationally, Kingfisher is yet to do so. Both airlines are mired in losses of several million US dollars, but expect to break even in the next two years.

The two airlines expect the minimum cost savings between the two airlines to be around Rs 1,500 crore (US$310 million) annually, the Times of India reported in an exclusive interview with Vijay Mallya. The airlines plan to operate more efficiently by not over lapping their routes at close time intervals, joint fuel management, crew training and utilisation and offering customers access to each other's frequent flier programmes, Reuters said.

Domestic air travel grew an annual 2.3 percent between April and August compared to 38 percent a year earlier, government data showed.