NEW DELHI: The keenly watched now-off, now-on Jet-Sahara deal is expected to usher in the `consolidation' in the Indian civil aviation sector, paving the way for healthy growth and competition in the already booming sector, analysts feel.

Though the deal between the two private carriers was announced last January, it fell apart by June last when Jet Airways failed to get all necessary government approvals.

At that time, Jet Airways, now a listed company, was to pay Rs. 2,300 crore for the acquisition of Air Sahara, promoted by Subroto Roy. However, the deal hit a rough patch and arbitration proceedings were instituted. Jet Airways had then paid Rs. 500 crore to Sahara.

"Fair play"

Addressing a press conference in the capital on Thursday, Alok Sharma, president, Air Sahara, maintained that the deal was "good" for both the companies as it had ensured "fair play and justice for both."

He said: "We are happy with the deal. Air Sahara goes to Jet Airways on as is where is basis." The deal was good for consumers, industry and the nation.

Future of employees

On the future of Air Sahara employees, numbering around 3,700, Mr. Sharma said they would be "looked after" by the Sahara Pariwar. Those who did not want to get absorbed in Jet Airways would be rehabilitated, relocated and readjusted in the group.

Boeing aircraft

Mr. Sharma said Air Sahara's order for purchasing 10 new Boeing passenger aircraft from the U.S. aircraft manufacturer would be honoured by Jet Airways.

Although details of the deal were not disclosed, aviation sources believe that Jet Airways would pay about Rs. 1,450 crore for acquiring Air Sahara without its real estate and helicopter business. Sources were inclined to put the enterprise value of Air Sahara at Rs. 2,000 crore.

Market share

With Air Sahara in its kitty, Jet Airways will command a combined domestic market share of about 32 per cent. With a fleet of 49 Boeing 737, new generation aircraft, three wide-bodied A-340 airliners, two Airbus A-330s and eight ATRs, Jet has six international and 44 domestic destinations in its flight schedule with a domestic market share of 24.5 per cent.

"Acquisition of Air Sahara is part of Jet's strategy to grow in the market. It will have more revenue and cash generation," the sources said.

Jet Airways, promoted by London-based Naresh Goyal, and Air Sahara began operations in 1993 when Indian skies were opened to private airlines. Air Sahara has 27 aircraft in its fleet, all of them leased from various companies.

New guidelines

In March last year, the Civil Aviation Ministry cleared new guidelines on mergers and acquisitions, allowing 100 per cent transfer of properties of one company to the other, including issues relating to aircraft, routes, parking bays and slots.

It had also removed the obstacle in the way of the acquisition of Air Sahara by Jet Airways.

Air India, Indian merger

The Jet-Sahara deal comes close on the heels of the mega merger of the two State-owned carriers — Air India and Indian Airlines — which is moving on the fast track with the business model and the new brand name under consideration by the Ministry.

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