Jet Airways (India) Ltd. and Kingfisher Airlines Ltd., India's largest domestic carriers, expects to save as much as 15 billion rupees ($309 million) by sharing resources and cutting duplicate routes. The prospects of a merger between the two airlines Jetair and Kingfisher are remote as both operate different types of aircraft and Jetair has a much higher valuation as compared to Kingfisher.

Jetair has totally a Boeing fleet while Kingfisher uses only Airbus planes on its routes. As a result of this, the pilots as well as technical staff of the two airlines are not compatible.

The only issue will be the near monopoly situation for the two airlines with their joint market share of 60 percent, while their nearest competitor in India has only a 16 percent share in the domestic market. Both the airlines will improve their finances through the collaboration and recent fall in prices of crude oil.

``No company can last if it doesn't cut costs,'' Kingfisher Chairman Vijay Mallya told reporters in Hyderabad, India today. ``The alliance will be able to help us.'' He didn't provide a timeframe for the savings.

Mallya and Jet Chairman Naresh Goyal face higher fuel prices, overcapacity and slowing demand that threaten to push the nation's aviation industry to a record $2 billion loss this year. India's airlines are filling only 67 percent of their seats on average compared with the 90 percent needed to break even, Goyal said today.

Jet and Kingfisher will jointly manage fuel expenses, share some pilots and allow cross-selling of tickets on each other's networks, the Mumbai-based carriers said earlier this week. The companies won't take stakes in each other, and some of the agreements need the regulator's approval, they added. Both the airlines however can benefit by code sharing, honoring each others documents by rationalizing of routes, through common ground handling, through common sales facilities and in purchase of fuel and other stores.

The arrangement to collaborate has the approval and blessings of the Civil Aviation minister as it is felt that it will improve the financial health of the aviation sector and will also benefit the passengers.

But the airlines have recently stopped planning to fly on uneconomical routes as a part of the cost-cutting exercise. Jetair has been flying to London and Middle East and was to start flying to USA. Kingfisher's foreign operations have yet to take off.

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