Presented by:

Gurpreet Singh(08-MBA-06)
Namrata Soodan(12-MBA-06)
Sonali Raina(29-MBA-06)
Sahina Sethi(24-MBA-060
Varun Abrol(37-MBA-06)
INDIAN AVIATION INDUSTRY
 Domestic market: current scenario

Indian
21% Air Sahara
11%

Air Deccan
19%

Jet Airways
Others Kingfisher
34%
1% Go Air SpiceJet Airlines
2% 6% 8%

Full-service carriers: 72% share

(Jet Airways, Indian, Air Sahara, Kingfisher Airlines)
No-frills carriers: 28% share
(Air Deccan, SpiceJet, Go Air)

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 Corporate Strategies in
M&A
Why?
• Gain market share
• Economies of scale
• Enter new markets
• Acquire technologies
• Strategic Benefit
• Utilisation of surplus funds
• Managerial Effectiveness
• Integrate vertically

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 Corporate Strategies in M&A

Exploit market power, economies of scale

& scope,
and market inefficiencies
Related industries
- Horizontal
-Jet-Sahara
Same industry/
Same market
- Consolidation Same industry/
Different market
Suppliers (Conglomerate)
-Vertical -LIC-UTI Bank
-ITC

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 HOT DEALS
Mittal- Arcelor
SBI- GE
ICICI- Sangli Bank
United Breweries- Shaw Wallace
Tata- Corus
Jet- Sahara
LIC may buy UTI Bank

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 Air Sahara in Jet Air Fold
Deal for Rs 1450 crore, 40% less
than the deal in Jan’ 2006.
The merged entity will have a
market share of 42% (largest
domestic private )
Buyout helps Jet Air to go
International.
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 Abstract

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 Chronological Events
in the deal
• JAN 19, 2006
• JUNE 20, 2006
• JUNE 21, 2006
• JUNE 22, 2006
• SEPT 22, 2006
• APR 12, 2007
• APR 16, 2007
• APR 20, 2007

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 Did Jet Airways pay too
much for Air Sahara???

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 To defend the dominance of
Indian Skies

New Players
Explosive 20-25% growth for
industry.
But Jet’s share declined from
42% to 37%

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 Regaining the dominance…
Three dimensions to
dominance…
1.Increase in market share
2.Control over a substantial part of
available airport infrastructure.
3.The only private player to fly
international.

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 This is not a market share
game ,but of
infrastructure.

Substantial cost reductions.

Staffing issues.

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 Advantages Jet will get
from the deal.

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