Tie-up will make Jet-Kingfisher strong: Airbus

Hyderabad, Oct 17: Airbus, the European planemaker said that the tie-up between Jet Airways and Kingfisher Airlines, India's top two private carriers would make both the carriers strong.

"I think the alliance with Jet definitely creates consolidation in the industry and that makes the carriers stronger and more substantial. We have been very pleased with our partnership with Vijay Mallya in Kingfisher. We think he has the ideal showcase for our product we have been flying. We have seen it is one of the best products of the world in terms of its business class service," said John Leahy, chief operating officer, Airbus.

On Monday, Oct 13 both Jet and Kingfisher forged an alliance to cut costs through code-sharing, sharing of ticketing, ground services, fuel management, crew training and utilisation.

Both airlines were mired in losses with Jet expecting to break even only by March 2010. Falling share markets have delayed their plans for capital raisings.

Jet and Kingfisher had bought rivals in 2007 as they fought for top position in a booming domestic market. Jet bought smaller Sahara Airlines and Kingfisher acquired India's first low-cost carrier Deccan Aviation.

But higher ticket rates due to fuel prices coupled with a slowing economy have hurt demand, forcing airlines to trim costs, exit loss-making routes and raise funds to stay afloat.

Following tie-up with Kingfisher, Jet Airways had retrenched 800 flight attendants on Wednesday, Oct 15 and said it would cut flights and lay off more staff due to a slowdown in demand.

The Indian aviation industry, which has combined revenue of six billion dollars, is expected to lose two billion dollars in the current financial year ending in March 2009.

Jet and Kingfisher airlines are collectively losing 1.30 billion dollars and have urged the government for a 40.7 billion rupee bailout package.

ANI