IA fears monopoly edge for Jet

New Delhi Government run Indian Airlines has opposed the allotment of Sahara's Airport infrastructure to Jet Airways. In a letter to the government, Indian Airlines’ chairman has asked for a clear policy regarding slot allocation and airport infrastructure.

Many small airlines have been raising the bogey of monopoly after Jet decided to buy out Sahara. State owned Indian Airlines seem to agree with them. In a strongly worded letter to the government it has asked the government not to allot airport infrastructure owned by Sahara to Jet airways.

The copy of the letter available with CNN-IBN says. “We would suggest that based on the existing policy, the landing slots and parking bays should be distributed solely by the airport owner based on the requirements of the scheduled carriers and of various users of that airport. Any special rights should not be assigned to the buyer of merged airlines, as Air Sahara cannot sell something that it does not own."

The letter further states that "the deal of Jet Airways and Air Sahara raises several questions particularly in view of the assertion of Jet Airways chairman that primary aim of the acquisition is to get right infrastructure at airports.'

After acquiring Sahara Jet has asked the government to transfer the international rights, flight slots and parking bays of Sahara airlines to itself.

The Jet-Sahara combine has about 78 aircraft in its fleet and almost about 70 per cent of the market share. In Delhi and Mumbai the two together will not only have the most number of parking bays but also cover huge areas in the terminal buildings.

In light of this the MRTP commission, which looks into issues of Monopoly has initiated an investigation as to whether the deal is monopolistic or not.

The pressure from the airlines seem to have convinced the director general of civil aviation to play it safe and the DGCA has now asked the government to formulate a clear policy on the allotment of Infrastructure in the case of mergers.

But the government has not yet made it clear whether the allotments to Jet will be made after a new policy is put in place or on the basis of the existing policy.