Just hours after my last post on embracing your competition , arch rivals Kingfisher and Jet Airways has announced that they will form a Code Sharing Agreement and a Joint Alliance.
(Just exactly like what “The Waking Life” propagates – Many people from different parts of the world come up with a similar thought flow at the same time – a thought process that travels across the world into minds, and strikes up a corresponding design)
With a steep rising prices in aviation fuel, the global financial meltdown and the sharp decline in the airline traffic , both Kingfisher and Jet Airways has come to realize that it is not sustainable to run the airline business in the long run, by competing against each other, after suffering a loss of $988 million between each other.
In fact , they have done the opposite. They embraced each other with a mutual agreement for both national and International flights and also sharing expenses in buying aviation fuel, despite retaining their individual brand identities.
Vijay Mallya himself has come out in the open , joining hands with Naresh Goel and proclaims that Jet Airways is a brilliant airline and vice-versa
This agreement leads to better seat utilization ,joint fuel management,crew sharing,optimization of flight routes and schedules and flight frequency and reduction in operating expense for both
With the current deal , the two companies now control 4 of the top airlines in the industry(namely Jet Airways ,Kingfisher, Sahara(Jet Lite) & Air Deccan (Kingfisher Red) )
and thereby easily have a combined market share of more than 60 % ,and with a intended strategy to increase the prices , its just a matter of time ,for the profits to come rolling in
P.S. I had actually assumed that embracing your competition was mainly advantageous in the retail sector. But it turns out , its true in any vertical or industry,as evident from the current post.