Air China's - Orient Aviation

NEWSMergers boost in IndiaAir India and Indian, Jet Airways and Sahara deals now on trackThe potential for a mergerbetween state-owned carriersAir India (AI) and Indian(formerly Indian Airlines)now looks certain to becomereality. In April the country’s Ministerfor Civil Aviation, Praful Patel gave thestrongest indication yet the government hasdecided to go ahead with the union.“We are proceeding in the direction of amerger. It may take a few weeks or a coupleof months to decide on a detailed strategy,”he said at a news conference in Dehli.It would create Asia’s eighth largestairline with a fleet of 112 aircraft operatingto 144 destinations.The move strengthens the widelyheld view that India is entering a periodof industry consolidation as the marketnegotiates a period of rapid expansion.Most analysts believe some of thenewcomers will not survive, or will beswallowed up by stronger rivals.When Jet Airways, India’s first successfulprivately owned airline - it began flying in1993 - agreed in January to purchase rival,Air Sahara, for US$500 million it was seen asthe beginning of a possible string of mergers.Together, the two would control around halfof India’s domestic market.The problem, now resolved, occurredwhen the government delayed clearancefor the transfer of Air Sahara’s rights toparking bays and landing slots at variousairports across India. At the same time, thecountry’s Monopolies and Restrictive TradePractices Commission (MRTPC) said it waslooking into the deal to see if it violated thelaw, including regulations on monopolypractices.In March, the two airlines had to winapproval for an extension of the legallyallowed transaction period by 90 days.The problem for the country’s aviationbureaucrats is they are waiting for thegovernment to release a wide-ranging andlong-awaited new civil aviation policy. It willinclude new guidelines to be followed for thetransfer of infrastructure rights, includingregulations for the transfer of parking bays,slots and other infrastructure facilities, incases of industry mergers and acquisitions.However, last month Minister Patelsmoothed the way for the Jet-Sahara merger,saying a draft of the country’s long awaitednew aviation policy has now gone to Cabinetfor approval. 44 ORIENT AVIATION MAY 2006