The deal between Jet and Sahara is a landmark in the history of Indian civil aviation as it signals the beginning of the much-awaited consolidation in the industry. However, Jet Airways will have to go through the turbulence of merger pains and face opposition from its competitors.

The growing number of private air-lines in the last couple of years literally crowded the Indian skies making consolidation in the aviation industry inevitable. Jet Airways which flies in dignified blue and corn-colored livery scored a first by starting the M&A trend in the Indian aviation sector, by acquiring Air Sahara, its closest rival in the private sector. This high-profile takeover saw Jet emerging as the country's largest airline, leaving government run Indian way behind. The deal (which is still subject to regulatory approval) has the potential to change the Indian aviation industry and will possibly have an impact on every constituent in the aviation chainfrom full service carriers, budget airlines to passengers and suppliers. The deal has placed both the parties in a win-win situation. For one, Jet has crowned itself as the king of Indian skies and two, in the process it has helped the Sahara group to exit out of its non-core business gracefully. Jet has left other players of the industry gaping by taking a significant lead, both in terms of size and market share.

The numbers say it all. The Jet-Sahara combine has a large fleet of 80 aircrafts (it will increase to 96 by 2007) and will have a market share of more than 50% of the domestic civil aviation. It will dwarf all other players in the most-profitable Delhi-Mumbai route by controlling almost all the parking bays, check-in counters and other infrastructure that are currently owned by Air Sahara. Jet also has the opportunity to expand to cities like Hyderabad and Kolkata, where it does not own hangers but Sahara does. More importantly, Jet has acquired planes that are similar to a bulk of its own fleetBoeing 737s, giving itself economies of scale. Further, Jet gets access to over 100 pilots and other technical staff who are in short supply in India.

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