Jet Airways and Kingfisher Airlines form Alliance

Jet Airways and Kingfisher Airlines have formed an alliance 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. While the two airlines will be able to rationalize their operations and derive the maximum synergies, there will not be any mutual equity investments between the two companies.

The downturn in the world economy has severely impacted the world aviation industry. The rapid increases in and the volatility in the crude oil prices and that of aviation turbine fuel and the slowdown in economic activity has resulted in a decline in air travel both on international and domestic segments of the air travel market.

The scope of the alliance will include the following areas:

- Codeshares on both domestic and international flights subject to DGCA approval. 
- Interline/Special Prorate agreements to leverage the joint network deploying 189 aircraft offering 927 domestic and 82 International flights daily. 
- Joint fuel management to reduce fuel expenses. 
- Common ground handling of the highest quality. 
- 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. 
- Reciprocity in Jet Privilege and King Club frequent flier programmes.

Commenting on the alliance, 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. India has witnessed tremendous growth in the past which has slowed down considerably. In this environment the Jet Airways – Kingfisher 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. There will be huge cost savings and revenue enhancement opportunities arising from this alliance.”

Dr. Vijay Mallya, Chairman, Kingfisher Airlines added, “This is a quantum leap forward in the evolution of Indian aviation which will benefit customers by delivering the most comprehensive integration in the industry. Both Jet and Kingfisher fully realize that better understanding of supply and demand in this capital and labour intensive industry is the key to profitability and enhancement of shareholder value. I look forward to this alliance delivering superior quality, cost savings, flexibility and enhanced consumer value which is the hallmark of all successful alliances.”

While maintaining their separate legal entities and brand entities both Jet and Kingfisher will examine co-branding opportunities and have formed a core committee of senior management personnel from both companies who will drive the various identified initiatives forward with immediate effect under the overall direction of Mr. Naresh Goyal and Dr. Vijay Mallya.

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