Kingfisher-Jet Airways Alliance !!
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Kingfisher-Jet Airways Alliance !!
Guys the unthinkable has just happened !
Kingfisher and Jet Airways have just announced an Alliance
!
The details from Times of India 13th Oct 2008.
NEW DELHI/MUMBAI/BANGALORE: The fight for survival has brought two of India's biggest business rivals — Jet Airways owner Naresh Goyal and Kingfisher Chief Vijay Malaya together.
After several rounds of "summit" talks between the two aviation czars, they announced on Monday night that they are forming an operational alliance that will command nearly 50% market share of the domestic skies — and could spell bad news for the low-fare model.
Each Jet and Kingfisher are losing up to Rs 10 crore daily. Now this deal, which may ultimately lead to a consolidation once one of the players has access to funds to buy out the other, could allow them to cut some losses by having features like code-share agreements, especially on foreign routes because Kingfisher will now go slow on expanding its international operations.
The two airlines may also not compete on domestic sectors by having flights on a sector at close to each other's timings; have better coordination in reducing capacity and hiking fares and possibly do common ground handling at airports to cut costs.
Mallya went to meet Goyal at Jet's head office at Mumbai's Andheri and then on Monday evening Goyal went to Kingfisher House at Vile Parle. Even the buzz about these talks helped pull the airline scrips up. On a day the Sensex closed 7.4% higher, the Kingfisher stock closed a whopping 32.35% higher at Rs 51.35. Jet, which touched its 52-week low of Rs 255 during intra-day on Monday, finally closed 11.12% higher at Rs 291.80. Currently, the scrips are trading at less than half their 52-week highs.
Market buzz credited aviation minister Praful Patel with bringing the two together to form brand GM (Goyal-Mallya) of Indian aviation. However, Patel laughed this off. "I didn't get into this. I just cautioned the entire industry and did not ask any one in particular to shake hands. This (Jet-Kingfisher alliance) is born out of necessity and adversity. Airlines have to first be able to survive for a later-day fight (for market leadership)," Patel told TOI.
The two tied up for what Patel called the "writing on wall" — huge losses and no early sign of recovery from the current turmoil. And just when high oil prices — that triggered their troubles — started to cool off, the global meltdown has led to twin troubles for cash-strapped airlines: further drop in traffic and banks not willing to lend money to the "risky" aviation business.
Attempts like cutting flights and laying off staffers haven't helped pull the airlines out of the woods so far. Now they are again willing to take unthinkable steps like Jet and Kingfisher's coming together.
Said an airline owner, "Talks between Goyal and Mallya started basically to evolve a consensus on two things — route rationalization (read cutting flights) and hiking fares in the hope that others will also be forced to do so. The subtext of the merger was always there. Both the airlines are financially stretched, and it's a matter of time before they face heat from creditors (if they aren't already). Airlines want to survive somehow till the next government is in place and then try for a change of policy to allow foreign airlines to buy stake in domestic carriers."
Kingfisher — which lost Rs 1,000 crore last fiscal — has been forced to drastically cut down on Mallya's ambitious international plans. The airline, which launched a Bangalore-London flight recently, had ordered 10 A-340s for being flown on nonstop-US route. But now it has sold three A-340s to a Nigerian carrier and converted order of five to the medium range A-330. Airbus was to deliver Kingfisher's first A-340 during the Hyderabad air show but the European major's statement of activities during the expo had no mention of bringing this plane.
In addition, Airports Authority of India (AAI) is also breathing down Kingkisher's neck for payment of dues. "At dues of over Rs 200 crore, Kingfisher is among the biggest private airline defaulters," said a senior AAI official. On October 7, oil PSUs also wrote to all airlines asking them to clear fuel bill dues or face stoppage of supply or switch over to cash and carry.
What does this mean for passengers?
The era of low cost flying could well and truly be over after this operational alliance. Both Mallya and Goyal have in the past scoffed at the concept of low cost carrier (LCC) in India as all carriers have to pay same charges. Calling LCCs low fare airlines, Jet and Kingfisher have raised fares of the LCCs they took over — Sahara (now JetLite) and Air Deccan (now Kingfisher Red).
"Together they will command half of domestic market shares. Any move by them to further raise fares will force other independent LCCs to either follow or become unviable and perish," said an airline official. Thanks to a sharp hike in operating cost in past few months, Deccan today carries about 3 lakh passengers a month as compared to seven lakh a year ago and loses twice the money now.
Kingfisher, Jet Airways announce alliance-India Business-Business-The Times of India
Kingfisher and Jet Airways have just announced an Alliance
!The details from Times of India 13th Oct 2008.
NEW DELHI/MUMBAI/BANGALORE: The fight for survival has brought two of India's biggest business rivals — Jet Airways owner Naresh Goyal and Kingfisher Chief Vijay Malaya together.
After several rounds of "summit" talks between the two aviation czars, they announced on Monday night that they are forming an operational alliance that will command nearly 50% market share of the domestic skies — and could spell bad news for the low-fare model.
Each Jet and Kingfisher are losing up to Rs 10 crore daily. Now this deal, which may ultimately lead to a consolidation once one of the players has access to funds to buy out the other, could allow them to cut some losses by having features like code-share agreements, especially on foreign routes because Kingfisher will now go slow on expanding its international operations.
The two airlines may also not compete on domestic sectors by having flights on a sector at close to each other's timings; have better coordination in reducing capacity and hiking fares and possibly do common ground handling at airports to cut costs.
Mallya went to meet Goyal at Jet's head office at Mumbai's Andheri and then on Monday evening Goyal went to Kingfisher House at Vile Parle. Even the buzz about these talks helped pull the airline scrips up. On a day the Sensex closed 7.4% higher, the Kingfisher stock closed a whopping 32.35% higher at Rs 51.35. Jet, which touched its 52-week low of Rs 255 during intra-day on Monday, finally closed 11.12% higher at Rs 291.80. Currently, the scrips are trading at less than half their 52-week highs.
Market buzz credited aviation minister Praful Patel with bringing the two together to form brand GM (Goyal-Mallya) of Indian aviation. However, Patel laughed this off. "I didn't get into this. I just cautioned the entire industry and did not ask any one in particular to shake hands. This (Jet-Kingfisher alliance) is born out of necessity and adversity. Airlines have to first be able to survive for a later-day fight (for market leadership)," Patel told TOI.
The two tied up for what Patel called the "writing on wall" — huge losses and no early sign of recovery from the current turmoil. And just when high oil prices — that triggered their troubles — started to cool off, the global meltdown has led to twin troubles for cash-strapped airlines: further drop in traffic and banks not willing to lend money to the "risky" aviation business.
Attempts like cutting flights and laying off staffers haven't helped pull the airlines out of the woods so far. Now they are again willing to take unthinkable steps like Jet and Kingfisher's coming together.
Said an airline owner, "Talks between Goyal and Mallya started basically to evolve a consensus on two things — route rationalization (read cutting flights) and hiking fares in the hope that others will also be forced to do so. The subtext of the merger was always there. Both the airlines are financially stretched, and it's a matter of time before they face heat from creditors (if they aren't already). Airlines want to survive somehow till the next government is in place and then try for a change of policy to allow foreign airlines to buy stake in domestic carriers."
Kingfisher — which lost Rs 1,000 crore last fiscal — has been forced to drastically cut down on Mallya's ambitious international plans. The airline, which launched a Bangalore-London flight recently, had ordered 10 A-340s for being flown on nonstop-US route. But now it has sold three A-340s to a Nigerian carrier and converted order of five to the medium range A-330. Airbus was to deliver Kingfisher's first A-340 during the Hyderabad air show but the European major's statement of activities during the expo had no mention of bringing this plane.
In addition, Airports Authority of India (AAI) is also breathing down Kingkisher's neck for payment of dues. "At dues of over Rs 200 crore, Kingfisher is among the biggest private airline defaulters," said a senior AAI official. On October 7, oil PSUs also wrote to all airlines asking them to clear fuel bill dues or face stoppage of supply or switch over to cash and carry.
What does this mean for passengers?
The era of low cost flying could well and truly be over after this operational alliance. Both Mallya and Goyal have in the past scoffed at the concept of low cost carrier (LCC) in India as all carriers have to pay same charges. Calling LCCs low fare airlines, Jet and Kingfisher have raised fares of the LCCs they took over — Sahara (now JetLite) and Air Deccan (now Kingfisher Red).
"Together they will command half of domestic market shares. Any move by them to further raise fares will force other independent LCCs to either follow or become unviable and perish," said an airline official. Thanks to a sharp hike in operating cost in past few months, Deccan today carries about 3 lakh passengers a month as compared to seven lakh a year ago and loses twice the money now.
Kingfisher, Jet Airways announce alliance-India Business-Business-The Times of India
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this means
passengers pay more....
route capacity according to the demand.
rationalisation of routes( trim)
extra staff go home to retire cell.
and pay/salary control in India
salary down/cut......
its better than industry collapse, now it will survive.
passengers pay more....
route capacity according to the demand.
rationalisation of routes( trim)
extra staff go home to retire cell.
and pay/salary control in India
salary down/cut......
its better than industry collapse, now it will survive.
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I think Jet and Kingfisher will try to optimise crew utilisation especially as Jet is short of ATR pilots.I dont think you will lose your job just yet Jet air but I am sure that at some stage we will see pay cuts
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I wonder what this will mean for expats awaiting employment?
I have just interviewd with jet for an ATR capt position, was told I am waiting now for DGCA clearance. wonder how this affect my employment offer, any suggestions ?
Acy
I have just interviewd with jet for an ATR capt position, was told I am waiting now for DGCA clearance. wonder how this affect my employment offer, any suggestions ?
Acy
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From an article in the Times of India:
Jet Air lays off 850 flight attendants-India Business-Business-The Times of India
Jet Air lays off 850 flight attendants
15 Oct 2008, 0042 hrs IST, Manju V,TNN
MUMBAI: The largest lay-off in the history of Indian aviation is expected to take place on Wednesday when as many as 850 Jet Airways cabin crew members, mostly on probation, will receive termination letters. The airline couriered these letters late on Tuesday night.
The tremors brought about by the worst downturn yet in the airline industry were felt on Tuesday itself, hours before the first Jet Airways flight of the day took off. Said a crew member, "About three and a half hours before a flight, the office transport reaches your home to pick you up. In the wee hours of Tuesday morning, hundreds of cabin crew members in Mumbai who were rostered for early morning flights waited in their uniforms to be picked up." When the worried flight attendants called up the airline dispatch office, they were told they had been de-rostered till further notice.
Though the Jet Airways spokesperson declined to comment on the extent of the lay-off, she did confirm that terminations were in the offing. "Because of the slowdown in traffic, both on international and domestic routes, we have announced discontinuation of a number of flights. As a professional organization we had to do a comprehensive rationalization of our network by taking into account the current traffic demand, our capacity utilization, etc. Consequent to this, we will have to release the unconfirmed staff to match up with the changes," the spokesperson said.
Jet Airways has a total of 1,903 cabin crew (as of last week) at its Mumbai base and 850 of them, who will now be "released", were those who were on probation or had put in less than a year and a half in the company. "The rumour doing the rounds here is that more cabin crew lay-offs are on their way. Even the people who de-rostered the crew today fear that they may soon be at the receiving end themselves," said an Jet official, on condition of anonymity.
The retrenched crew are said to have taken it very hard, particularly since they were given a verbal job assurance as recently as two months ago by the top management. Chief commercial officer Sudhir Raghavan in one of his weekly Friday interactions with the cabin crew had said that their jobs were insulated. "Irrespective of whatever cost cuts we make, Mr Goyal has told me not to touch the cabin crew, he had said," a crew member recalled Raghavan saying. "So no one pressed the panic button when Goyal and Mallya made the tie-up announcement," he adds...
15 Oct 2008, 0042 hrs IST, Manju V,TNN
MUMBAI: The largest lay-off in the history of Indian aviation is expected to take place on Wednesday when as many as 850 Jet Airways cabin crew members, mostly on probation, will receive termination letters. The airline couriered these letters late on Tuesday night.
The tremors brought about by the worst downturn yet in the airline industry were felt on Tuesday itself, hours before the first Jet Airways flight of the day took off. Said a crew member, "About three and a half hours before a flight, the office transport reaches your home to pick you up. In the wee hours of Tuesday morning, hundreds of cabin crew members in Mumbai who were rostered for early morning flights waited in their uniforms to be picked up." When the worried flight attendants called up the airline dispatch office, they were told they had been de-rostered till further notice.
Though the Jet Airways spokesperson declined to comment on the extent of the lay-off, she did confirm that terminations were in the offing. "Because of the slowdown in traffic, both on international and domestic routes, we have announced discontinuation of a number of flights. As a professional organization we had to do a comprehensive rationalization of our network by taking into account the current traffic demand, our capacity utilization, etc. Consequent to this, we will have to release the unconfirmed staff to match up with the changes," the spokesperson said.
Jet Airways has a total of 1,903 cabin crew (as of last week) at its Mumbai base and 850 of them, who will now be "released", were those who were on probation or had put in less than a year and a half in the company. "The rumour doing the rounds here is that more cabin crew lay-offs are on their way. Even the people who de-rostered the crew today fear that they may soon be at the receiving end themselves," said an Jet official, on condition of anonymity.
The retrenched crew are said to have taken it very hard, particularly since they were given a verbal job assurance as recently as two months ago by the top management. Chief commercial officer Sudhir Raghavan in one of his weekly Friday interactions with the cabin crew had said that their jobs were insulated. "Irrespective of whatever cost cuts we make, Mr Goyal has told me not to touch the cabin crew, he had said," a crew member recalled Raghavan saying. "So no one pressed the panic button when Goyal and Mallya made the tie-up announcement," he adds...
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it is worst condition of indian aviation till ever in history more than 900 job cuts in jet and soon in kingfisher too and as i belong to engineering department in other airline the same situation going to strike here too so when boom will come again wait for that .....and the more worst condition for those who r married and have wife and children dependent on them what they gonna do????///
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Sheesh!
another 1100 are to be without jobs over the next few days.
1,900 employees to lose jobs: Jet Airways
Bloody shameful the way they did this...
another 1100 are to be without jobs over the next few days.
1,900 employees to lose jobs: Jet Airways
Bloody shameful the way they did this...
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pilots , engineers too bye bye
all pilots less than 300 hrs on type and engineers less than 2ys going to terminate..............well what to say bye bye aviation dream to most
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alliance@ top
its not only k+j........include airindia as well.
appears staged show
to cut....1,2,3...and cut
script seems for horror movie
Last edited by getsetgo; 18th Oct 2008 at 08:10. Reason: add
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Qatar Airways will take you all!Apply and Fly to Doha and you will feel at home.At least 90% of staff came from India.
............................................................ ..........
yea
90% indian staff
100% indian curry
0% indian freedom
............................................................ ..........
yea
90% indian staff
100% indian curry
0% indian freedom
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Read on a different forum that the terminated employess have been reinstated Friday.Apparently, according to a press conference statement late thursday night Mr. Goyal " could not sleep for two nights "over the decision and decided to reverse it .
Maybe it was politically driven but, good for him and I am glad for the folks who got their job back----for now.
Alt3
Maybe it was politically driven but, good for him and I am glad for the folks who got their job back----for now.
Alt3
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I might upset a few here. The fact is to survive, all will have to take a pay cut. starting right from the top.Communication between the company and employees is very important and the staff should know the financial status of the airline.
Good luck to all.
Good luck to all.
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Historically you might find that employee paycuts seldom are the determining factor in the survivability of an airline. Ofcourse the airline will tell you that.
When a company is not profitable due to mismanagement, stragetic or otherwise, or due to factors such as high operational costs (ATF etc), currency devaluation, poor load factors, no amount of paycuts will
guarantee that the airline won't fade away. In fact one could argue that if all the employees worked for free, the company might still lose money and not survive. Will the company save lots of money by reducing salaries? Yes--Will it affect the bottom line--Maybe/maybe not. Just a thought.
When a company is not profitable due to mismanagement, stragetic or otherwise, or due to factors such as high operational costs (ATF etc), currency devaluation, poor load factors, no amount of paycuts will
guarantee that the airline won't fade away. In fact one could argue that if all the employees worked for free, the company might still lose money and not survive. Will the company save lots of money by reducing salaries? Yes--Will it affect the bottom line--Maybe/maybe not. Just a thought.