9W and S2 FF programs ? When will the two be merged ? - Airliners-India

Sandy2901 · Recruit

9W and S2 FF programs ? When will the two be merged ?

VABBy · Member

The civil aviation minister has given a green chit to takeover of S2 (Air Sahara) by 9W(Jet Airways) once the process of merger is complete i believe the FFP programs would be merged too.

But one thing which i am not able to understand is that parking bays and landing and departure slots are the property of AAI right? Then when an airline wraps up its operation be it a formal closure or taking over by competetion why would their slots be transferred to the new owner when the exsisting entity in whose name the slots were there would cease to exsist.

Is this the global norm or practise...

can someone clarify plzzz

vivekman · Member

Dear Vabby,

Parking slots are an asset of an airline. Yes, the property belongs to AAI, but they are leased to airlines at a price - sort of like a car parking slot in a building. So, if Jet has bought Sahara, it has bought all its assets including, planes and parking slots. The price of the deal has taken the cost of these slots into consideration as well.

- Vivek

vabby wrote:
But one thing which i am not able to understand is that parking bays and landing and departure slots are the property of AAI right? Then when an airline wraps up its operation be it a formal closure or taking over by competetion why would their slots be transferred to the new owner when the exsisting entity in whose name the slots were there would cease to exsist. Is this the global norm or practise... can someone clarify plzzz

VABBy · Member

Hi mates this question is bit off topic but still related to 9W FF program. Now we all know that TG has tied up 9W. My dad is a gold status with Royal orchid. So if he flies jet which we would doing in july first week will he be able to accrue mileage on that....

what we normally do for collecting points is that my dad uses his amex gold for all expenses including petrol bills apart frm his business trips on star alliance member flights.....

so jst wondering if he can accumulate points on jet,s flights.....

regards

vabby

ps- I think Nimish has gold status on Thai. Nimish do u have a clue on this....

karatecatman · Member

New Trouble

http://www.forbes.com/home/feeds/afx/2006/06/20/afx2826086.html

AFX News Limited
India's Jet Airways may call off Air Sahara takeover deal - report
06.20.2006, 01:20 AM

HONG KONG (XFN-ASIA) - India's Jet Airways may call off its proposed 23-bln-rupees takeover deal for rival Air Sahara if it does not get security clearance from the government by Wednesday, India's Economic Times reported on its website.

It said that Jet appears to be using the lack of security clearance to wriggle out of the deal which has not been greeted well by the market and saw Jet's share price falling to new lows.

The Sahara group is fighting hard to get the security clearance in place before the deadline, the report said.

The newspaper cited sources close to the deal as saying that Jet had indicated clearly that the deadline for getting government approvals will not be extended.

karatecatman · Member

http://inhome.rediff.com/money/2006/jun/20jet1.htm

Jet threatens to call off Sahara deal

June 20, 2006 16:49 IST

India's largest private carrier Jet Airways is understood to have threatened to withdraw from the Rs 2,300 crore (Rs 23 billion) deal to acquire Air Sahara if Sahara Group did not get all the requisite approvals from the government, including security clearances, before the expiry of escrow account on June 21.

Jet Airways Chief Naresh Goyal had shot off a letter to Sahara, expressing unhappiness and concern over the delays and turn of events.

"We are still waiting for all regulatory approvals to be in place," Jet Airways said in an official statement, while Sahara officials declined to comment.

Jet-Sahara deal under a cloud

But sources in the Sahara group said it has already obtained clearances for four nominees of Jet Airways to be put on Air Sahara Board and communicated the same to Jet Airways for reconstitution of the Board.

They, however, wondered why Sahara group should be held responsible if the government did not give permission to Naresh Goyal to join the Board of Air Sahara. They were also puzzled as to how security has become an issue for Goyal, who is already operating his own airline in the country.

On March 23, the two sides had agreed to extend the terms of share purchase agreement by 90 days without changing the enterprise value of the deal.

The deal had come under pressure owing to absence of necessary clearances from Directorate General of Civil Avaition.

the_380 · Member

A blank threat!:crashed:

Jet knows it will lose if it calls off the deal...Kingfisher and Spice are waiting to pounce on Sahara if Jet calls off the deal.

vivekman · Member

Yup, Sahara is an open bait waiting for anyone with deep pockets to pounce on it. But, I think the only ones who should buy out Sahara is Jet because of the commonality in their fleets (Boeing 737s).

No point in Deccan or someone else with A320s to buy an airline with a fleet of 737s!

Of course Kingfisher is a different story altogether. Vijay Mallya is more than willing as it would give him the green light to go international......

HAWK21M · Member

Who will be willing to absorb those losses.

regds

MEL

Karan69 · Member

vivekman wrote:

Yup, Sahara is an open bait waiting for anyone with deep pockets to pounce on it. But, I think the only ones who should buy out Sahara is Jet because of the commonality in their fleets (Boeing 737s). No point in Deccan or someone else with A320s to buy an airline with a fleet of 737s! Of course Kingfisher is a different story altogether. Vijay Mallya is more than willing as it would give him the green light to go international......

Barring the obvious defects associated while taking over a loss making airline [an estimation shows that S2 looses 60-100 crore a month]

I am certain that the reason 9W is unsure about the S2 deal is because it did not forsee IC and AI seriously talking about mergers.

Its dream of being the carrier went the largest fleet in India and a preffered international customer route based atleast to Air India were shattered

But now they have a chance to get out of it, they are sure not to let that go.

As far as the 737 commonality is concerened it wont matter as all of S2s aircraft are leased, so whoever picks them up [if anyone now] does not have to bother about the aircrafts.

Cheers,

Karan

VABBy · Member

I actually feel sorrie for the airline which was indeed a very innovative one. Always the one who gave me good deals on the DEL-CCU and RT sector. Personally i have always had a soft corner for them because i have been pampered well whenever i flew S2 compared to 9W...

I dont know how much were the losses like but i believe with deep pockets of the Sahara group what was the problem for them in running an airline. Agreed its lossmaking but then airline businesses always have a long tenure before they break even. Its a capital intensive business...

The deal might have benificial for Sahara family who would have become richer by 2300 crores But its S2 which got killed in all this hotch potch with revenue and market share both taking a dive.....

Its better if Saharashri runs the airline himself induces fresh capital for airline to buy and lease more aircrafts......

Nimish · Member

ps- I think Nimish has gold status on Thai. Nimish do u have a clue on this...

My *A gold status is on Air Canada - not Thai. Remember, all of 9W's discounted fares don't earn full miles, and some of the cheaper fares don't earn any miles at all. The other f*** up is that 9W will give you only the actual miles flown - so 169 miles for BLR-MAA, and once you add the 50% reduction for a cheaper ticket, it's just not worth it.

Besides, I don't think the 9W/TG tieup includes recognizing the gold status members.