‘jet’-lag redefined...

IIPM BEST B-SCHOOL

A year back, the acquisition would have led to a thumping control of 47% of the domestic market. Today, the situation appears cheerless. With Sahara’s market share having fallen to 8.2% coupled with Jet’s market-hold plummeting to 25.5% (on January 31, 2007), the combined entity commands just over 32.7% – less than what Jet alone could boast of last year! Adds Capt. Gopinath, “Sahara’s market share of 6-8% is on account of indiscriminate & unsustainable pricing. It will not really add to Jet’s market share...” The only clear benefit is that Jet gets parking bays, especially on the Mumbai-Delhi route, which is also the busiest in India.

Two short-term capital requirements are likely to make matters worse. There’s the much-needed Rs.4 billion infusion to revitalise the Sahara (for maintenance, repairs, upgradation & re-branding of the airline) added to its $2.1 billion investments for acquisition of twenty new aircraft s by 2008-09. Jet’s international operations suffered from losses of $8 million for the nine months ended December 2006.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative