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Rivals Vijay Mallya and Naresh Goyal meet; may form tie-up

Naresh Goyal and Vijay Mallya, owners of Jet Airways and Kingfisher Airlines, met on Monday leading to speculation that the country’s two top private airlines are heading for a tie-up.

Goyal and Mallya held a closed-door meeting held at the headquarters of Jet Airways in Mumbai. Sources tell the two airlines are working on a major agreement to cut down losses by forming tie-ups on domestic and international routes.

The deal could even eventually lead to a merger, the sources say. The sales and marketing teams of Jet Airways and Kingfisher will work together. Kingfisher plans for the US market stand suspended.

The Indian airline industry, battered by mounting losses, has been asking the Central Government for a bailout worth Rs 5,000 crore. Jet and Kinfisher are losing an estimated amount of up to Rs 20 crore a day.

Goyal and Mallya, both leading representatives of the Federation of Indian Airlinies, could also discuss the bailout demands.

“Yes, Dr Mallya and Mr Goyal have met today (Monday),” said a Kingfisher Airlines spokesperson. “I would not like to comment on anything at this juncture,” the spokesperson told PTI.

A Correspondent says a merger between the two airlines is unlikely and they are looking at close cooperation. The cooperation would be in the form of two airlines sharing their teams for sales marketing and ground handling.

Kingfisher is not working well on the London route, so Jet could give it seats on this route. Cooperation on domestic routes as well. It may not be good news for consumers, as the partnership between the two airlines could create a monopoly of sort.

October 13, 2008 - Posted by | Business, General | , , , , , , , , , ,

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