The Hindu : Business : Jet-Kingfisher chiefs meet

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Tuesday, Oct 14, 2008
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Business

Jet-Kingfisher chiefs meet

Ramnath Subbu

Possibility of code share arrangement

Aviation industry under severe financial pressure
High ATF prices continue to
cause worry

MUMBAI: Mounting costs and particularly fuel charges have led Kingfisher Airlines chief Vijay Mallya to meet Jet Airways Chairman Naresh Goyal at Jet’s office in a Mumbai suburb on Monday.

While a Jet spokesperson declined to comment on the subject of the meeting, the two heads of the largest Indian private air carriers were meeting to possibly work out a strategy to jointly tackle their problems.

While there is no word on the discussions at the meeting of the two airline chiefs, a code share agreement between the airlines could be a possibility. This would result in savings for both airlines.

The severe financial crunch facing the industry has led the two airlines to have postponed or even dropped a number of new initiatives, including flight expansion plans, and they have even resorted to staff lay-offs. They are also reportedly facing pressure from oil companies for payment of fuel bills.

Jet fuel or aviation turbine fuel (ATF) accounts for about 45 per cent of the operational costs of Indian carriers and is estimated to be 70 per cent more expensive than its cost overseas due to the incidence of multiple taxes levied by various States.

The aviation industry is under severe financial pressure, which has only been aggravated by the global financial meltdown and the loss of passengers.

Kingfisher recently downsized 300 staff while Jet (including JetLite) has downsized around 650 jobs. Jet Airways has started a route rationalisation exercise for its international operations.

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