Goyal’s Air Sahara acquisition marks a turning point in Indian aviation, but will it fulfil expectations?

IIPM PUBLICATION

India’s largest domestic airline just got larger. In a landmark deal on January 19, 2006, Jet Airways announced an agreement to acquire the entire share capital of Air Sahara for $500 million. This could well begin a wave of consolidation in the already overcrowded Indian aviation industry. But lobbying by other players is on, and the regulator has still not given its verdict

Naresh Goyal’s designs on Air Sahara were certainly not unknown. That’s perhaps why the Jet – Sahara deal didn’t ruffle many feathers. Since Dr. Vijay Mallaya’s Kingfisher Airlines gave up the idea of acquiring Air Sahara on various grounds, it was almost certain that Jet would be the one to guzzle Air Sahara. With this acquisition, Jet Airways’ market share in the domestic air traffic in India will reach nearly 50%, which, in effect, means Jet will rule the Indian skies. And whoever said Jet is new to the idea of monopolies? Even Bill Gates himself would perhaps vouch for the business intellect and acumen of Naresh Goyal, in this regard. A commerce graduate with extensive experience in the aviation industry, Goyal took the giant leap to set up Jet Airways in 1992, and soon , Jet had the state owned carriers on the backfoot. Jet has also been accused of using its premier position in the aviation industry rather unfairly.

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Source : IIPM Editorial, 2007

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