AIRLINES REMOVE AGENCY COMMISSIONS

Air India and other carriers are planning to eliminate commission to travel agents in India. In most other places commission has already been eliminated by airlines. Air India may also go in for route rationalisation and withdraw from some destinations in America and Asia. The airline has been hit badly by the fuel crisis and may suffer heavy losses this year. Jet Airways, Kingfisher Airlines and Jetlite have already announced through their circulars that they are reducing agency commissions to zero per cent from 1 October, 2008.


WILBUR ROSS BUYS STAKE IN INDIA’S SPICEJET

India's budget air carrier SpiceJet has accepted US-based billionaire investor Wilbur Ross' $80 million (Rs.345 crore) offer and is ready to offload at least 10 percent stake to the private equity fund. According to Ajay Singh, director, SpiceJet, “this is a significant investment for SpiceJet to retain its low-cost model. This will strengthen SpiceJet and help it in its expansion plans," Singh said. "We are delighted to have WL Ross as an investor in SpiceJet," the airline said in a joint statement. WL Ross & Co LLC., Kingfisher Airlines owner Vijay Mallya, and Goldman Sachs were in the fray to acquire SpiceJet's stake ever since the troubled carrier indicated it was looking for ways to raise funds and would not rule out a stake sale. However, SpiceJet spurned Mallya's offer of a share-swap merger. "I did discuss with the management of SpiceJet, I won't deny that, but I like to do good deals and I won't do expensive deals," Mallya said. Others reported to be in the fray were Anil Dhirubhai Ambani (ADA) Group and Paramount Airways that operates in southern India. SpiceJet, which began its operations in 2005 and currently has a fleet of 15 planes, has been running losses for quite some time and the surge in global crude oil prices for the past two months made SpiceJet board decide that fresh infusion of fund was necessary to keep the carrier alive. The airline suffered a loss of more than Rs.133 crore in fiscal 2008 as compared to Rs.78 crore in the previous year.