Bitter rivals Vijay Mallya of Kingfisher Airlines and Naresh Goyal of Jet Airways on Monday stopped short of merging, and announced an unprecedented alliance to survive the difficult times facing the airline industry.
The scope of the alliance includes cross utilisation of crew, cross-selling of flights, common ground handling, joint fuel management to reduce fuel expenses, code sharing on both domestic and international flights and to leverage joint network deploying 189 aircraft of the two airlines.
In a joint statement, the two airlines clarified that there will not be any mutual equity investments in the two companies.
“It is not a cartel (together they account for 60 per cent of the market),” said Goyal. “We are coming together to cut costs. It is for the first time two major Indian carriers are coming together in difficult times."
“We both recognize the economic reality and the growth opportunities and that is why we came together to save costs and tide over the economic crisis,” said Mallya, adding, “This is a meeting of minds and hearts and our relationship will continue for a long time.”
Mallya told reporters waiting outside his office that "the alliance would be a quantum leap forward. It would benefit customers of both Jet Airways and Kingfisher through fully realised network and better understanding."
How, he did not explain. Mallya further said he and Goyal would share more details on the alliance at the forthcoming airshow in Hyderabad, where union civil aviation minister, Praful Patel, would also be present.
He added the alliance had the blessings of Praful Patel.