Embed Size (px)
Citation preview
Presented by:
Gurpreet Singh(08-MBA-06)Namrata Soodan(12-MBA-06)
Sonali Raina(29-MBA-06)Sahina Sethi(24-MBA-060Varun Abrol(37-MBA-06)
INDIAN AVIATION INDUSTRY
Domestic market: current scenario
Indian 21% Air Sahara
11%
Air Deccan 19%
Jet Airways Kingfisher Others 34% Go Air SpiceJet Airlines 1%
2% 6% 8%
Full-service carriers: 72% share
(Jet Airways, Indian, Air Sahara, Kingfisher Airlines)
No-frills carriers: 28% share
(Air Deccan, SpiceJet, Go Air)
6 6
20 20
Corporate Strategies in M&A
Why? • Gain market share• Economies of scale• Enter new markets• Acquire technologies• Strategic Benefit• Utilisation of surplus funds• Managerial Effectiveness• Integrate vertically
20 20
Corporate Strategies in M&A
Exploit market power, economies of scale & scope, and market inefficiencies
Same industry/Same market- Consolidation
Related industries- Horizontal-Jet-Sahara
Same industry/Different market(Conglomerate)-LIC-UTI Bank
Suppliers-Vertical-ITC
20 20
HOT DEALSMittal- ArcelorSBI- GEICICI- Sangli BankUnited Breweries- Shaw WallaceTata- CorusJet- SaharaLIC may buy UTI Bank
20 20
Air Sahara in Jet Air Fold
Deal for Rs 1450 crore, 40% less than the deal in Jan’ 2006.The merged entity will have a market share of 42% (largest domestic private )Buyout helps Jet Air to go International.
Abstract
20 20
20 20
Chronological Events in the deal
• JAN 19, 2006• JUNE 20, 2006• JUNE 21, 2006• JUNE 22, 2006• SEPT 22, 2006• APR 12, 2007• APR 16, 2007• APR 20, 2007
20 20
Did Jet Airways pay too much for Air Sahara???
20 20
To defend the dominance of Indian Skies
New Players Explosive 20-25% growth for industry.But Jet’s share declined from 42% to
37%
20 20
Regaining the dominance…Three dimensions to dominance…
1.Increase in market share2.Control over a substantial part of available
airport infrastructure.3.The only private player to fly international.
20 20
This is not a market share game ,but of infrastructure.
Substantial cost reductions.Staffing issues.
20 20
Advantages Jet will get from the deal.
