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Air Sahara to triple fleet

It is set to expand by hiring Global consulting firm Ernst and Young (E&Y), reports Gaurav Choudhury.

india Updated: Sep 19, 2006 08:44 IST

Stung by its abortive merger attempt with Jet Airways, born-again Air Sahara is set to undertake a major expansion exercise that involves enhancing its fleet strength to 75 aircraft by 2011, nearly three times the current 27, its president told Hindustan Times.

Global consulting firm Ernst and Young ( E&Y) has been hired to prepare a five-year revival plan, Alok Sharma said, adding the plan was expected to be ready within the next two weeks.

"Any decision on fresh infusion of funds would depend on the five-year roadmap which is being finalised by E&Y. The specific instruments for injecting funds would also depend the stage of the expansion plan for which we would need the money," he said.

The airline will also undertake a major brand restructuring exercise.  "The airline's brand has suffered immensely during the merger crisis. We will undertake a brand-building exercise with new brand ambassadors," Sharma said.

Air Sahara is trying to bounce back after losing the initiative in a battle for the skies, where it lost an early advantage built on aggressive branding, an early adoption of Internet auctions to sell tickets and fancy schemes like on-board auctions for passengers at attractive prices. However, a slew of no-frill and low-cost airlines have since entered the market, crowding the competition for Sahara.

Last month, Air Sahara had announced it would purchase ten 737-800 Boeing aircraft worth $700 million and set itself a target of cornering a 20 per cent market share within five years from the current eight per cent. The company currently flies 20 Boeing 737-400s and seven 50-seater aircraft, referred to in the industry as Canadian regional jets.

Last January, Jet Airways had announced that it would acquire Air Sahara at a valuation of $550 million (about Rs 2,300 crore) and paid an advance of Rs 500 crore as part of the buy-out process.  But the deal fell through after Jet failed to meet a deeadline to complete the acquisition by June.

Sharma said Air Sahara's valuations would undergo a change after it unveils its five-year plan. "Valuations would be done again and it would be inappropriate to comment at this point on whether we would be divesting equity in favour of anybody," he said.