MBO in Jet Airways
I am closely tracking the strike by the Pilots of Jet Airways. Any frequent flier in Jet Airways will agree with me that its service quality has gone down after its tie-up with Kingfisher Airlines. Now you look at any two cities and find the best time to travel between the cities and you will find that Kingfisher offers the most convenient timings and Jet does not.
It was a different story before the tie up between the two airlines. I do not know what actually happened behind the scenes. But Kingfisher managed to get a better deal while having a tie-up with Jet.
I personally think Jet will benefit a lot if it breaks its tie-up with Kingfisher. And this is where I see the strike by the pilots as an opportunity. The pilots can do an LBO on Jet and take it private and release value by just breaking the tie-up with Kingfisher. The pilots union will not come in the way of shareholders' value creation as the ownership (at least majority ownership) will be with the pilots.
Any takers?
It was a different story before the tie up between the two airlines. I do not know what actually happened behind the scenes. But Kingfisher managed to get a better deal while having a tie-up with Jet.
I personally think Jet will benefit a lot if it breaks its tie-up with Kingfisher. And this is where I see the strike by the pilots as an opportunity. The pilots can do an LBO on Jet and take it private and release value by just breaking the tie-up with Kingfisher. The pilots union will not come in the way of shareholders' value creation as the ownership (at least majority ownership) will be with the pilots.
Any takers?
posted by Pitabas Mohanty at 3:46 PM
4 Comments:
MBO would be good only if the management would make the airline model generate cash! Which is not the case in India. A lot of policy changes need t take place in india in order to make the airlines work
hei nice to meet you in your blog...visited back and leave your coment for me, ok.. best regrads from tasya.
Thanks you. Very good post.Unless they can offer a really compelling reason for users to come back, it will be the next.
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