Indian aviation industry is facing losses due to cut-throat
competition and rising fuel prices. The total loss faced by Indian airlines is
$1.5 billion this year. According to the Centre for Asia Pacific Aviation, an
industry consultant, these losses are forcing Indian carriers to merge or form
alliances.

Another alliance between Indian carriers is on the cards.
The economic times reported that Vijay Mallya is negotiating with Gulf-based
fund Istithmar World PJSC and U.K.-based Bhupendra Kansagra to buy 26.33
percent of SpiceJet. Kingfisher Airlines acquired India's biggest budget carrier
Deccan Aviation Ltd last year. According to the BSE500 Index today the Deccan
Aviation was the best performer and the Spicejet was the second best performer.

SpiceJet's stockholders are expected to get one share of a
merged company with Kingfisher for every three shares owned, the Business
Standard reported last week. After the reports regarding Kingfisher acquisition
of shares of SpiceJet ,the shares of SiceJet gained over 15% to Rs28.9. Deccan
Aviation gained 11.9 rupees, or 20 percent, to 70.4 rupees after climbing as
high as 23 percent to 72 rupees, the most since Jan. 23.  With this deal Kingfisher will become a major
player in the aviation industry. Its Deccan
airlines are already working successfully.