AIR SAHARA MARKET SHARE
Air Sahara marketshare down after takeover by Jet
Lower agent sales, shifting passenger loyalty trigger erosion
BY A CORRESPONDENT
April 15, 2006
Air Sahara, which is being acquired by Jet Airways for Rs 2300 crore,
has lost much of the marketshare it had at the time of the takeover,
media reports said. At the time of the acquisition, Air Sahara held a
marketshare of 13% in India, following Indian Airlines and Jet
Airways.
According to a report in Economic Times, Air Sahara's marketshare has
now slipped to between 8 and 9%. This has happened apparently because
travel agents have stopped promoting Air Sahara tickets sales as well
as due to a host of flights being cut down due to pilot strikes and
resignations. Now, the No.3 position is held by Air Deccan, a one-year
old low-cost rival.
Earlier, Air Sahara used to offer an agents' commission higher than
that given by rival airlines. After the announcement of the merger,
this came to an end. This led to a direct fall in sales. Also, the
period of uncertainty over the merger also led to an erosion of
passenger loyalty.
At the time of acquisition, Jet Airways and Air Sahara jointly held
about 50% of the domestic marketshare. With the slipping margins, Jet
Airways has an uphill task ahead, putting the Sahara house in order.
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