| Hyderabad. The
code-sharing and operational alliance between Jet Airways and Kingfisher Airlines
were needed to avoid bankruptcy and ensure profitability, said the chiefs of the
two airlines Wednesday at the end of a chief executives’ conclave here at the
India Aviation 2008 air show.
“Code-sharing and route rationalisation
were needed by both of us to avoid bankruptcy,” Jet Airways chairman Naresh
Goyal told reporters after an open house interactive session between Civil Aviation
Minister Praful Patel and more than 35 CEOs from the aviation industry. According
to Goyal, the Indian air traffic sector is now burdened with around 30-40 percent
excess capacity, and all airlines were bleeding. “There is no Chapter 11
bankruptcy in this country, so what do you do,” he said, referring to a bankruptcy
code in the US that allows reorganisation under that country’s bankruptcy
laws. “The industry seat factor now is 60-65 percent while break-even
is at 90 percent,” he said explaining why the two airlines were losing nearly
Rs.150-200 million a day. “This kind of alliance was inevitable and
happens in every other industry,” Goyal said. “This has happened in
Europe and elsewhere but happening the first time in the Indian airlines space.” Added
Kingfisher chief Vijay Mallya: “We have set up a group to examine the route
rationalisation issue because it does not make sense that both of us operate the
same route with low seat factors when we can rationalise so that a route is serviced
at a high rate of capacity use.” Denying that Jet had laid off employees
or were going to do that, Goyal said: “The people laid off were probationary
employees and there will be no retrenchment of permanent employees.” “Our
employees are our family and we will take care of all of them... if our people
our not there then there will be no company either,” he said. Both
Mallya and Goyal hinted that the airline industry was seeking some kind of regulatory
body to ensure healthy competition while avoiding excess capacity. “International
airlines are dumping capacity, dumping prices and there is no regulation,”
said Goyal. (IANS) | 
