UNI

Mumbai, Apr 17: Air Sahara which has been acquired by leading private carrier Jet Airways for Rs 1,450 crore will be re-named as 'Jetlite'.

"Jetlite will be a separate entity, in fact, a cent per cent subsidary of Jet Airways. It will operate as an airlines between a so-called low-cost carrier and full service carrier,'' Jet Airways Chairman Naresh Goyal on Monday said in a media briefing here.

"Our application for the change in name is at present with the Ministry of Company Affairs, and once we get the clearance from there, the new entity will become Jetlite,'' added Mr Rajesh Chaturvedi, Financial Advisor and Auditor of the Jet Airways.

Replying to a query whether acquisition will have any impact on the Jet coffers, Goyal replied in negative. He said ''We do not believe that this acquisition will cause any strain to the cash flows of Jet in any manner.'' Terming the deal as beneficial for both the parties, Goyal said the synergistic use of available resources is expected to provide a strong platform and a larger operational base for future growth as well as obtain access to skilled personnel such as pilots and engineers, categories of which are significantly short in the country.

On the question as to what made change his mind on the deal, which in the first attempt had failed to take off, Goyal said that the market dynamics have changed since then, and in the changed climate of the aviation industry, he had to re-evaluate the opportunity.

Goyal also said the price was commercially sensible, as he made and managed 40 per cent reduction in the fresh deal from the original price.

It is expected that the combined equity will have a larger fleet, operations and network.

After the acquisition, the combined fleet of 87 aircraft is likely to grow to over 120 aircraft in the next two years, and the combined daily frequencies are likely to be over 450 flights as against 330 flights, being operated by Jet Airways alone. Also, the combined network is expected to cover 66 points, with increased flights on key sectors.

At the same time, the combined net revenues are likely to go by over two billion dollars.

The new independent entity, according to Goyal, will cater to the untapped segment and will help overcome the over capacaity problem.

Recently, Jet Sahara signed a deal to acquire cent per cent shares of Air Sahara for a lump sum amount of Rs 1,450 crore. Of this amount, Rs 500 crore have already been paid to the the selling shareholders in March 2006. As part of the acquisition agreement, another Rs 400 crore or to be paid by Jet Airways to Sahara on or before April 20 this year.

However, the balance of Rs 550 crore will be payble in instalments commencing from March 2008 and ending March 2011.