Air Sahara is wholly owned arm of Jet Airways
Friday, 20 April 2007, 07:00 Hrs
New Delhi: Keeping with the deadline set by arbitrators, Naresh Goyal-promoted Jet Airways Friday paid 4 billion ($90 million) to the Sahara India group to officially mark the acquisition of the ailing rival Air Sahara. "With this closure of this transaction, Sahara Airlines Ltd has become a wholly-owned subsidiary of Jet Airways, effective today," said a Jet Airways statement issued here Friday. "It is the intention of Jet to operate Sahara Airlines as separate entity whilst improving the operational, financial performance of the business by leveraging the size of Jet Airways," the statement added. The airline also deputed a small management team, headed by Garry Kingshott, to manage the business and effect a smooth takeover. The development immediately gives Jet Airways access to Air Sahara's fleet of 27 aircraft and a market share of close to 35 percent for the combined entity in the Indian skies, experts said. Jet, on its part, has a fleet size of 62 aircraft and operates 340 flights daily to some 50 destinations, not just in India but also to London, Singapore, Kuala Lumpur, Colombo, Bangkok and Kathmandu. While Jet officials confirmed that a part of the payment had been made to the Lucknow-based Sahara India group, they declined to divulge the actual amount. "The first of the five instalments for the acquisition of Air Sahara has been paid," an Air Sahara official, however, said. The remaining amount would be paid in four equal annual instalments of 5.5 billion from March next year. Jet had last year already paid 5 billion that was lying in a disputed escrow account, bringing the valuation of Subroto Roy-controlled Air Sahara to 14.5 billion ($330 million), Air Sahara officials said. After the two sides reached a pact last week following arbitration proceedings, Jet Airways had decided to convert Air Sahara into a low-cost carrier and rename it JetLite. The civil aviation ministry had also made it clear that there would be no hurdle in the transfer of assets and other resources from one carrier to another. "If Air Sahara have aircraft, parking slots or landing slots or schedules, there are no issues. The policy is already in place and all these can go to the next owner," Civil Aviation Minister Praful Patel had told reporters here.