Check before the takeoff

Check before the takeoff

The Indian airline industry is ripe for consolidation. So it is quite natural that Jet Airways and Air Sahara are reportedly reviving their stalled deal.

Though the business case for the acquisition by Jet is perhaps compelling, the Competition Commission of India should also look into its effect on the structure of the airline industry.

The commission had few powers when the merger was initially planned, but it is now on the verge of empowerment. It should treat the Jet-Sahara deal as its first major case. This is not just because the market share of Jet could be close to 50%, once it buys Sahara. It would have been less of a worry if the two did not fly on similar routes.

Also, access to parking slots and flying rights could be a barrier to new entrants, more so in India, where airport capacityis low and these key entitlements are in short supply.

A similar deal in the West would need clearance from anti-trust regulators.