Jet Airways (India) Ltd, fresh from buying smaller rival Sahara Airlines Ltd, will have to take fresh security clearances from the Union home ministry for the board of directors at Jetlite—as the taken over airline is being rechristened—according to the civil aviation ministry.
Ministry officials said any new company, even if only a change of name has been effected, requires approval from the government. “With a change in name, it automatically becomes a new company. It will require security clearances for all its directors,” said a senior ministry official, asking not to be quoted since Jet Airways had not yet applied for such approval.
Jet Airways will have to approach airline regulator Directorate General of Civil Aviation with the list of new members, who will be on the Jetlite board. The request for approval will then be examined by the civil aviation ministry. After that, the request will be forwarded to the home ministry. The process can take anywhere from two to three months, or even more in case any director is not an Indian national.
Plans to acquire Air Sahara—as the Sahara carrier is branded—last year by Jet Airways had been delayed after the home ministry took several weeks to give Jet chairman Naresh Goyal security clearance to join the New Delhi-based Sahara Airlines’ board.
Jet Airways executive director Saroj Dutta said all security clearances were received last year and no fresh clearances were required. “The reconstituted Air Sahara has been taken over by us and subsequently a new board of directors will be appointed,” he said. “It will happen in the next few days.”
A Jet Airways spokesman said the company’s application for a change in the name of the acquired airline to Jetlite is pending with the ministry of company affairs.
Jet Airways plans to launch Jetlite as a ‘value’ carrier, positioned between no-frills carriers and full-service airlines. Such a positioning, it expects, will help it carve a new segment for itself among the nine domestic airlines in India, four of which are budget carriers.
The Mumbai-headquartered Jet Airways last week announced the acquistion of Sahara Airlines for Rs1,450 crore on an “as-is-where-is basis”. The buyout gives the acquirer use of Sahara’s parking bays, its pilots and the right to fly the target’s routes including international destinations. The first Rs400 crore instalment of the five-tranche deal is to be paid by 20 April.
Whether Jet Airways will be able to fly Air Sahara’s planes before it gets security clearance from the home ministry will depend on the memoranda of understanding the two airlines have signed, officials at DGCA said.
Under the takeover agreement, Jet Airways is allowed to use the Air Sahara brand for six months after 20 April.