Mumbai: Jet Airways (India), the country’s largest private airline is likely to merge its wholly-owned subsidiary JetLite into Jet Airways in the current fiscal. Jet promoter Naresh Goyal is considering the merger to break even by the end of the current calendar year.
Jet Airways had acquired Air Sahara in 2007 and had rechristened it as JetLite, as a low-cost carrier. Jet Airways chief commercial officer Sudheer Raghavan told ET, “We are not ruling out the merger but haven’t finalised anything.”
It was learnt that Jet Airways wants to raise funds but bankers and financial institutions will put in money only if the business will be profitable and merged into a single entity.
Jet Airways, which has more than 25 per cent share of the Indian market, thinks it is difficult for low-cost carriers to remain in business with such low fares in current turbulent times.
An analyst with a brokerage firm said JetLite has a weak balance sheet and merging JetLite into Jet Airways would be a wise decision in the current scenario as carriers are looking for mechanisms to stay afloat. Moreover, as a full-fledged carrier and business class target, JetLite didn’t fit into Jet Airways long play strategy.
25/08/08 Mithun Roy/Economic Times
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