After snapping up Air Sahara in a $500-million deal, Jet Airways is likely to operate it as a wholly-owned subsidiary till regulatory and other clearances are granted to the acquisition process.
While the name of the 100 per cent subsidiary has been finalised, it will be announced only after it is approved by the regulatory authorities, including the Directorate General of Civil Aviation, Jet Airways sources said.
Jet was awaiting security clearances from the Home Ministry for at least 10 of its officials, to enable them become members of the new Air Sahara Board.
Once security clearance is granted, the reconstituted Board would meet to adopt a resolution to enable Jet operate Air Sahara as its wholly-owned subsidiary, the sources said.
Till then, the two carriers would continue to operate as separate entities, they said, adding that once the Board resolution is passed, the aircraft livery could be changed, the mandatory engine checks (C-checks) and other activities could be carried out by Jet Airways on Air Sahara aircraft and other facilities, including the ticketing and airport counters.
The 10 top Jet officials have started working with their Air Sahara counterparts to help them streamline sales, ticketing and several managerial issues, they said.
Jet Airways had acquired Air Sahara for an enterprise value of $500 milion in January and had paid an advance of Rs 500 crore (Rs 5 billion) in March end as part of the buyout package.
On Jet Airways seeking formal approval of the Civil Aviation Ministry for the merger, the sources said it would be sought only after the new guidelines for mergers and acquisitions in the aviation sector are notified.
Under the new guidelines evolved by the Aircraft Acquisition Committee, a 100 per cent transfer of property is allowed after merger or acquisition. The property includes aircraft, routes, time-slots and parking bays.
Responding to questions on the deal, Civil Aviation Minister Praful Patel on Tuesday said the government would have nothing to do with it.
"If they want to run a separate company, they can. If they want to merge, they can. It really does not matter to me," he said when asked whether the government would allow Jet to set up a new subsidiary to give effect to its acquisition.
"Consolidation and mergers are now the order of the day and they will take place. That is none of the government's business," Patel said.
He iterated that national carriers Air-India and Indian would also merge in 2006, which would turn the combined entity into a mega carrier with about 130 planes.
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