Jet gets Sahara assets, road clear for merger

Rights cannot be transferred to a third party.

Allowing the transfer of Air Sahara's entire fleet and airport infrastructure to Jet Airways, the government today cleared the way for the Lucknow-based airline's Rs 2,300 crore acquisition.

The government's aircraft acquisition committee, which included representatives from the civil aviation ministry, the Directorate-General of Civil Aviation and the Airports Authority of India, had agreed to the transfer of all Air Sahara properties, including parking bays and slots, to Jet Airways, civil aviation ministry officials said.

Today's decision will be the benchmark for all future mergers and acquisitions in aviation, including the proposed merger of state-owned carriers Air-India and Indian.

The Jet-Sahara deal, announced in January, was stuck over the transfer of assets as the government was initially opposed to it. Last week, after several rounds of negotiations, Jet Airways and Air Sahara had decided to extend the March 23 deadline for concluding the deal by 90 days as a result of the delay in approvals.

According to sources close to the deal, the merger would not have taken place in its current form if the government permission to transfer the entire infrastructure had not come.

Jet Airways and Air Sahara executives refused to comment on the development.

With this, Jet Airways gets the entire 26 aircraft belonging to Air Sahara, its 26 parking slots in various airports across the country as well as rights to operate 134 flights a day to 34 destinations. Jet Airways operates 300 flights a day to 43 destinations with its 53 aircraft.

The permission to transfer the assets has been granted on the condition that these will not be further transferred or leased to a third party.

Government sources said the aircraft acquisition committee had finalised its guidelines on mergers and acquisitions and would be sending them to the civil aviation ministry very soon for its approval.

The sources added that the new guidelines would be out next week after Civil Aviation Minister Praful Patel gave his nod.

The guidelines on mergers and acquisitions in the aviation sector are expected to draw up the detailed norms regarding how infrastructure, aircraft and operational permits will be transferred in the case of a merger.