Jet-Sahara Deal a Lose-Lose Deal by Nishit Vadhavkar

We have heard of a win-win deal but this should surely go down in Indian Aviation history as a lose-lose deal.

Lets look at it from Sahara point of view. Last yr they were pocketing around 2300 crores and were gonna live happily ever after. Now they get around 1400 crores, lot of heart ache, and had to run an airline which made losses for a year.

Jet claims 40 pc discount to the price offered last year. But they will have to bear some of Sahara's losses, interest lost on 1500 cr in escrow account, lawyers fees so actually they have to shelve out Rs 1950 crores.

For 1950 cr what are they getting?

Rights to fly to international routes which they already. 24 aircrafts which are on lease anyway and aircraft type is different from jet, one is boeing other is airbus. they get pilots who can easily fly away to their competitors as they did last year.

They do they get important parking slots in delhi and mumbai but thats not worth the price paid. From naresh goyal point of view, if the arbitration panel had voted against him, he would have to shelve out around 1000 crores and got nothing. by paying double at least he is getting something.

The people to gain are Kingfisher and Air Deccan, for them one rival less in the skies. Air Sahara was undercutting everyone in the business. Jet is unlikely to do the same. The gleeful reactions say it all.

Gopinath of Air Deccan says Jet buying Sahara is like marrying a girl because you have lived with her for a while. Vijay Mallya wishes all the best to jet with a loud guffaw. Air Deccan remains my top stock to buy and the current merger is just one bonus for it.

Wait for Deccan to come to rs 75 and pick up huge quantities. 3 years from now i expect it to quote at rs 500 nothing less.