Merger Talk denial by GoAir

GoAir denies merger talks with its largest rival in Indian aviation i.e. Spice jet. GoAir chief executive officer says that, they are not looking for any kind of merger with Spicejet. This all was told to reporters during a press conference on 25th March’09 in New Delhi. The merger has been denied by saying it as one of the rumors. The officer also said that Jet Airways and Kingfisher airlines too had a merger as a part of cost cutting by becoming code sharing partners, sharing crew and managing fuel so, there can be a consolidation with other airlines as a part of cost cutting.

The officer says that GoAir is planning to add on fleets, taking it to 20 by 2012 from current six. Though merger is good for airlines to come out of any kind of losses but still making decisions and implementing them is a task in itself. In the last the officer adds on that, an intelligent investor is always an opportunity but this all depends on conditions as well.

British Airways to strike a code-sharing agreement with Go Air

British Airways will soon strike a code sharing, co-branding and marketing agreement with GoAir. This would lead to an equity stake in Go Air by British Airways. By this code-sharing agreement both the airlines will get equally benefited, BA can mark its reputation in Indian market and Go Air can do the same in international market. BA is the largest passenger’s contributor after US so; this is definitely going to help Airlines industry in India. The deal would benefit Go Air by $350 million which is definitely a huge profit to the airlines. For this deal Go Air has appointed a London based Bank Euromax Capital for the transaction.

Indian Government is also looking forward to this agreement between the foreign airlines with domestic flights India. Earlier Royal Bank Scotland and Standard chartered were the two banks which were supposed to make an equity investment into GoAir. The IATA in response has said that 2009 will be the worse year than 2008 in terms of number of passengers and yield, so in these conditions a foreign airline having an equity share in Indian airline is definitely going to lessen the effect of recession in the market of airlines industry.