Jet buys Air Sahara for Rs 2,300cr

 Assuring maximum benefits to shareholders, Goyal said the cost of operations would go down substantially due to economies of scale leading to improved revenues and profitability.

On the issue of integrating the two airlines, Alok Sharma, vice president of Sahara Airlines, said the overall objective would be to make the combined entity larger and stronger, and added that all issues between Jet and Air Sahara would be resolved amicably.

He also said that no timetable has been set for total integration, and added that there were "a lot of processes" to be undergone including several clearances from various government authorities.

Sharma said that while all 27 aircraft of Air Sahara were on lease, other tangible assets like ground equipment, engines, spares and other inventories would be transferred to Jet. The lease of these aircraft is likely to end by 2010, he said, adding that two new leased aircraft would arrive in February and March.

Regarding reports that certain pilots had quit Air Sahara following the Jet takeover, Sharma said: "These are only rumours. Nothing as such has happened."

The following is the joint statement issued by Jet and Sahara Airlines (SAL) following the acquisition deal:

"Jet Airways India and SAL are pleased to announce the execution of a share purchase agreement for acquistion by Jet Air the entire capital of Sahara Airlines. The deal, which was jointly executed on January 18, is subject to confidentiality.

The agreement has been executed for an all-inclusive, enterprise value of around $500 million for SAL. The transaction is for an all-cash consideration.

Pending cofirmation of regulatory approvals, both the airlines will continue to operate independently.

Sahara India confirms that workers shall not lose their jobs, and cadres and gross emoluments will be unaffected. Upon closure of the transcation, based on requirements and performance, Jet Airways shall absorb suitable employees."

The joint statement was signed by Subrata Roy, chairman and managing worker of Sahara group and Naresh Goyal, chairman of Jet Airways.