April 12, 2007

India's Jet Airways restarts talks to buy Air Sahara

MUMBAI (AFP) - India's largest private carrier Jet Airways said on Tuesday it had revived talks to take over domestic rival Air Sahara after an earlier proposed 500-million-dollar deal collapsed.

The takeover would be India's largest airline merger.

"Negotiations have re-commenced for the buyout," a Jet Airways spokeswoman told AFP in Mumbai, India's financial centre.

The spokeswoman would not comment on a television report that the two airlines had already struck a deal for 418 million dollars.

The merger collapsed nine months ago in a row over pricing.

Afterwards both sides went to court to seek money lodged in an account intended for the merger.

The new takeover talks came amid arbitration hearings in Mumbai over the return of money to the two companies.

As of last December, Jet held a 32.8 percent share of India's booming aviation market while Air Sahara had an 8.7 percent share, according to figures from the Directorate General of Civil Aviation.

At least half a dozen carriers, including budget airlines, have taken flight in the past three years in India's liberalised skies, which were previously dominated by two state-run companies.

The sector is expected to see a wave of consolidation as analysts say there are too many airlines.

India's airlines lost a total of 400 million dollars in the nine months ended December 2006 as high fuel and aircraft purchase costs hit carriers, airline experts said at an aviation conference earlier this year.

Source: Yahoo!7 News

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