Tuesday, December 12, 2006

SpiceJet deal to alter designs in the skies

Mumbai: The Tata group’s proposed equity exposure in SpiceJet, albeit a ‘financial investment’ has already raised the hackles of the top guns in the business, though the Tatas have been at pains to emphasise that their small stake does not entitle them even a board seat in SpiceJet.
Industry players, however, see the move as the Tatas gaining a toehold in a business they’ve always wanted to be in, though no one is willing to speak on record.
The Tata entry pre-empts any attempt by Jet Airways, currently the largest player in the market, to take a stake in SpiceJet.
Kingfisher was, at one time, reported to be in talks to buyout the NRI promoters of SpiceJet.
As the airline with the largest marketshare, Jet Airways has the most to lose.
Jet was outspoken in its lobbying against the Tatas entry into the airline business in 1997.
The situation is now completely different and Jet is under siege from LCCs on one side and shrinking margins on the other.
12/12/06 Economic Times