Jet Airways may not get all Sahara rights

Infrastructure may be redistributed based on air traffic and aircraft movements.

Air Sahara's airport infrastructure, including parking slots, and flight operation rights, may not automatically go to Jet Airways. Earlier this year, Jet Airways signed a deal to acquire the entire equity of Air Sahara for $500 million.

The civil aviation ministry will decide about the parking slots and flight operation rights only after examining the merged entity's operational schedule.

According to civil aviation ministry officials, the infrastructure belongs to Airports Authority of India (AAI) and is given to airlines based on air traffic and aircraft movement.

"We will have to look at the flight plans and schedules of the airline before deciding on the parking bays at airports. We will be seeking clarifications from Jet Airways on this," said an official.

Under an alternate formula being considered, the AAI will take back all the parking bays of Air Sahara and redistribute them among all carriers with a substantial percentage going to Jet.

Jet Airways' Chief Financial Officer Carl Saldana said the company did not see any major regulatory problems coming in the way of the deal.

He also said the deal would have to be concluded by March 31, 2006. Otherwise, Jet Airways would have to re-negotiate the $500-million acquisition with Air Sahara in step with the agreement between the two private carriers.

Saldana also said Jet's $500-million issue of foreign currency convertible bonds to part fund the acquisition had been deferred by about two months to May this year.

Jet Airways will also have to take approval from the aircraft acquisition committee, which permits domestic carriers to acquire aircraft, for transferring Air Sahara's aircraft to its own fleet.

Jet may also be asked to redraw its routes to meet the regulatory requirement of mandatory flying on smaller routes.

Under the rules, airlines have to service smaller routes to get permission to operate on lucrative and busier routes. In addition, it will have to apply afresh for permission to operate flights on all the routes Air Sahara flies.