Cutting costs: Pvt airlines to pool in resources

In an increasingly buoyant sector, private airlines are coming together to share engineering resources, equipment, technical manpower and training requirements, for cutting down costs of operations.

While Kingfisher Airlines, GoAir, Air Deccan and IndiGo Airlines are joining hands for pooling their resources, Jet Airways is in talks with Air Deccan for possible sharing of spare parts and technical expertise. The development assumes significance in the backdrop of Jet's Rs 2,225-crore acquisition of Air Sahara and reports of other airlines teaming up to take on Jet.

"The four-member league has agreed to transfer passengers between each other's flights on an agreed flat fare in case of disruptions or overbookings. Joint purchase of spare parts and pooling of resources will bring down the cost of airline operators substantially," said a top airline executive.

The representatives of Kingfisher Airlines, GoAir, IndiGo Airlines and Air Deccan had met in Mumbai last week and agreed to share engineering resources, among other things.

Kingfisher Airlines Chairman and Managing Director Vijay Mallya confirmed that Airbus operators' representatives like G R Gopinath of Air Deccan, Jeh Wadia of GoAir and Rahul Bhatia of IndiGo Airlines had agreed on several issues.

"All Airbus operators are planning to synergise operations by teaming up for common objectives. This includes sharing technical manpower and expertise in the operations," he pointed out.

From January 31, these airlines would transfer passengers of other flights on a flat fare in case of flight disruptions or overbooking . They also decided to avoid conflicting departure timings between the same city pairs being served and agreed on interlining so as to provide a wider network choice to passengers.

"The airlines will share consignment stocks of spares and engineering resources. They will share simulators too for training purpose. The players will share ground support equipment at all common stations provided at common charge," sources said.

Significantly, the airlines had agreed not to poach licensed manpower from each other subject to sharing of technical manpower and training instructors.

"They will establish a common compensation package for all licensed expatriates," the sources said. These airlines had decided to form an association in the name of Indian Airline Operators' Association (IAOA).

While Gopinath wanted an apex association on the lines of Nasscom, another no frill-carrier SpiceJet welcomed the move to form an umbrella platform for the domestic airline industry.

Meanwhile, Jet Airways is in talks with Air Deccan for sharing spare parts and technical expertise for ATR aircraft.

"We are in dialogue with Air Deccan only for sharing spare parts and technological expertise. However, there is no passenger-sharing agreement in any category routes. If their passengers want to fly in Jet Airways, they need to pay Jet Airways fare," sources close to the developments said.

Jet Airways Chairman Naresh Goyal pointed out that there was no harm in co-operating with other airlines for joint purchase and joint pooling of spare parts, engineering resources and other consumables.