The Hindu Business Line : Sahara to operate with a new name

As soon as all regulatory approvals are received, Air Sahara would operate as a 100 per cent subsidiary of Jet Airways, however, with a new name, sources told Business Line.

The name of the new airline would be made public in the next day or two, sources added. Interestingly, this will be the third name change for Air Sahara. The airline first took to the skies as Sahara Airline before becoming Air Sahara.

Meanwhile, a 10-member team from Jet Airways would help Air Sahara in its operations till all regulatory approvals are received.

Sources indicated that the entire merger process should be completed within nine months from regulatory approval being obtained.

While the Aircraft Acquisition Committee of the Ministry of Civil Aviation recently proposed a 100 per cent transfer of property including aircraft, routes and parking bays, when one company buys another, the orders are yet to be officially notified. Jet Airways will be in a position to make a formal proposal to the Government seeking clearance for the acquisition only after the guidelines are officially notified, sources said.

Officials, however, insisted that the guidelines had been framed keeping the best international practices in mind and not to benefit any particular airline.

Jet Airways acquired Air Sahara for an `enterprise value of $500 million' in January this year. Both airlines had earlier hoped to complete the transaction by end-March this year. However, with no regulatory approvals, they decided to extend the period for the completion of the transaction by three months.

In the last week of March, Jet Airways paid an advance of Rs 500 crore to Air Sahara as part of the buyout package.

The completion of the acquisition process would help Jet Airways have a market share of more than 50 per cent in the domestic arena.

Commenting on the acquisition of Air Sahara by Jet Airways, the Minister for Civil Aviation, Mr Praful Patel, said that it was for the new owners to decide on the future course of action for the merged entity. "The Government does not regulate business. Mergers will always take place in this business. It for the two airlines to decide whether they want to merge or run each as a separate company, " said the Minister.

More Stories on : Airlines | Mergers & Acquisitions | Jet Airways (India) Ltd

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