The Hindu Business Line : MRTPC orders probe into Jet-Kingfisher alliance

New Delhi, Oct. 17 The high-profile alliance between Kingfisher Airlines and Jet Airways may have flown into some turbulence, with the Monopolies and Restrictive Trade Practices Commission (MRTPC) on Friday asking its investigative arm, the Director-General of Investigation and Registration (DGIR), to probe the operational agreement between the two private carriers.

On Monday, the two airlines had entered into an alliance the scope of which includes code-sharing on both international and domestic flights apart from looking at joint network rationalisation. The alliance will also look at a joint fuel management strategy so as to reduce expenses, apart from working on cross-selling flight inventory.

Co-branding

The alliance partners claimed that several of the initiatives being proposed under the alliance, including operating code-share flights, will begin only after it is approved by the Directorate General of Civil Aviation (DGCA). While maintaining their separate legal entities and brand entities, both Jet and Kingfisher will examine co-branding opportunities.

According to sources, the MRTPC has asked DGIR to file its preliminary report on the investigation in 60 days. “The DGIR would examine whether the alliance could result in a monopoly or a restrictive business practice, and also from the point of cartelisation. The DGIR would take cognisance of the agreement, which could lead to nearly 60 per cent of market share being handled by the two carriers,” sources pointed out.

Convenience factor

Announcing the formation of the alliance, airline officials said that it will offer greater convenience to passengers both in term of flight timings and pricing of tickets. Both the airlines claimed that the alliance was being set up to cut costs as fuel prices were increasing and the number of passengers carried was decreasing as airfares had increased.

In a statement, the Chairman of Jet Airways, Mr Naresh Goyal, said that all over the world, airlines have formed alliances in order to become more efficient, improve revenues and provide seamless travel opportunities for their customers. “The alliance represents a completely new industrial model for domestic aviation which would be based on an unprecedented depth of co-operation between the two companies,” Mr Goyal said.

Related Stories:
Kingfisher, Jet hold talks, may forge operational alliance
Ministry yet to hear from Jet-Kingfisher duo on pact

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
MRTPC orders probe into Jet-Kingfisher alliance

Ministry asks banks to allow cos to utilise sanctioned loan limits

Forex reserves fall $10 b on FII outflows

Is it time to expect retail prices of petrol, diesel to fall?

Satyam beats guidance; net profit rises 42%

Banks slow to use RBI facility for loans to MFs

Global financial crisis impacts coffee

Markets this week

Sensex sinks below 10,000

Sensex @ 10K: up in 483 days, down in 193

How sectoral indices fared