Monday, 31 December 2007

Airline Update (India)

As the year draws to a close, its now apparent that it will be remembered as an year of consolidation and international expansion dreams kicking off for some.

Kingfisher and Deccan have merged and will retain the Kingfisher name (their current 46% stake will be increased to 51%). This is the third deal of this nature after the merger of Air India and Indian Airlines (now just Air India) and Jet airways acquiring Sahara (now known as Jetlite).

Jet airways has kicked of its international operations successfully and has been adding new routes and destinations as its fleet receives new members. An exclusive lounge for their more privileged passengers has be unveiled at their European hub, Brussels. Code sharing with other international airlines are taking shape and it all looks a rosy picture going into the new year for them.

Air India following their merger is being inducted into the Star Alliance, which is the world's biggest airline alliance, now with 19 existing partner airlines. Full alliance benefits will probably arrive in 2009. Air India is poised to make a fresh order for extra widebody aircraft (possibly including the new Airbus A380) as it begins inception of the new Boeing aircraft from its last order (deliveries from this order are set to continue for the next 2 to 3 years). The airline is also planning to establish a European hub either at Munich, Germany or Vienna, Austria.

With Kingfisher also set to start flying outside India's borders by the end of 2008 it appears that the Indian players are beginning to compete on a global stage with services that are truly world class. Its clear they don't simply intend to match services of their international counterparts but to exceed them! An exciting year to look forward to from this perspective, compliments of the season and a Happy New Year to all, wishing you good health and success in the year ahead.

Tata motors set to acquire Jaguar and Land Rover marques from Ford

Tata has emerged as the clear front runner to acquire the classic english marques from ailing Ford which is looking to curb losses by releasing the loss making brands. Ford however decided to retain Volvo for the present.

Two other companies have also showed keen interest, one of them Mahindra & Mahindra also of Indian origin, although Tata is the clear favourite after receiving approval from the unions in the UK.

So, what does Tata stand to gain from the deal?
In the long run, acquiring the two marques will improve Tata’s own offerings due to knowledge gained and share of expertise. In the meantime if they feel they can restore profitability of Jaguar it will be a bonus.
Jaguar and Land Rover also stand to gain cause they will be in the hands of a really large firm which has a lot of financial resources and so they have their best shot of success (i.e. retaining the objectives of their branding and remaining in existence!)

Its a risk for Tata, but we’ll never know what could have been if they don’t try, so Tata deserves credit for their bold moves; and 10 years from now it’ll be interesting to see what came of this deal, if the marques are still under Tata, and the progress that Tata has made in the other vehicle classes with it’s own offerings.