SpiceJet, GoAir in talks for consolidation

Delhi-based low-cost carrier SpiceJet is in talks with the Wadia group-owned GoAir for either a merger or to acquire a controlling stake.Sources close to the development said SpiceJet CEO Sanjay Aggarwal met GoAir Managing Director Jeh Wadia to discuss a deal late last month.When Business Standard contacted Aggarwal, he said: “It is true that Jeh and I travelled together. But I cannot comment on anything relating to a deal at the moment.”He said he had “said before that there is a need for more consolidation in the market and that there will be fewer carriers than at present”.Pointing out that there are several ways of organic growth, he added that “consolidation is definitely one of them, and it may take place through a merger or an acquisition”.Wadia, however, declined to comment on the issue. “How can I comment on market speculation?” he said in reply to a question on whether SpiceJet had approached his airline for an alliance. An email questionnaire sent to him was unanswered.Sources from both companies also said SpiceJet recently made an offer to GoAir Chief Financial Officer G P Gupta to join the Delhi-based airline as chief administrative officer.On February 26, Aggarwal told an international news agency SpiceJet wanted to set up a regional airline to connect smaller cities in the country.Industry experts said another advantage of a merger would be the fact that GoAir was looking at increasing its fleet to 20 aircraft by 2011, from five at present.

Paramount Airways woos GoAir for buyout

Update: GoAir may be open to divesting around 40% stake even as the south-based Paramount Airways has placed a $100-150 million cash buyout proposal to the former. The Chennai-headquartered premium service carrier could lace it with a stake offer to the Wadias in the merged company, sources said.
(Source: ET)
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Madurai-based Paramount Airways is interested in acquiring the Mumbai-based budget carrier GoAir, promoted by the Wadia group.

Sources close to the developments said the investment bankers of Paramount Airways have expressed their interest and initiated discussions with GoAir representatives. The talks, however, have not made much headway as yet as GoAir is reluctant to move ahead.

Paramount Airways, which currently operates only in south India, has firmed up plans to enter the western region. GoAir has only four leased aircraft but Paramount is more interested in its slots, parking bays, pilots and other infrastructure, sources said.

GoAir had earlier indicated its plan to dilute 26-40 per cent equity through a private equity placement.

GoAir's Wadia calls this a baseless speculation.

(Source: Business Standard)