Moreover, Kingfisher — whose costs are much higher than Air Deccan’s — stands to gain more from any possible synergies and cost reduction. Though analysts are doubtful whether synergies will save Rs 300 crore, as Mallya claims, there are likely to be cost reductions for both. “What you don’t see is where the synergies are,” says Venkat Ramaswamy, executive director, Edelweiss Capital and the chief architect of this deal, in Mumbai. “The experience will not change but the two airlines can individually bring down costs.” He says both carriers stand to gain dramatically from keeping reduced spares (each engine is $8 million or Rs 32.8 crore), use the same ladders, reduce duplication on routes, sell seats on each other’s flights and provide seamless travel. The two can share costs on engineering and maintenance of a virtually identical fleet. Once he delves more into Air Deccan’s books, points out an Air Deccan source, he will find that he has bought his aircraft (A320) at $1.5 million (Rs 6.15 crore) more per aircraft than the price negotiated by Air Deccan. According to him, if Mallya chooses to go back to Airbus and renegotiates on the basis of the deal they have given to Air Deccan, he can probably be richer by another $30 million (Rs 123 crore) or so.

Mallya had mulled buying Sahara when it was up for sale. He had even offered what now seems ridiculous — $400 million (and $200 million when the two did an IPO) — for it. Now, in hindsight, he must be thanking his lucky stars it didn’t happen. Air Deccan has new aircraft, several of which are owned. It has aircraft bought at lower prices (for the same plane) than he himself managed, as opposed to Sahara’s fully leased fleet. There was no fleet commonality with Sahara. With Air Deccan, he enters an entirely new — the low cost — space . The list of advantages is endless here, says Centre for Asia Pacific Aviation chief executive officer (CEO) Kapil Kaul, in Delhi.

But whatever the gains may be for individuals, there is no doubt that this will change the rules of the game for the aviation industry for the time being. “We have seen it happen time and again,” says Edelweiss’ CEO and managing director Rashesh Shah. “Cement, telecommunications — the moment an industry is controlled by two or three large players, it will do well. You can’t even begin to imagine the implications of this kind of consolidation for the industry as a whole. The bloodbath will be over.” He expects the industry turnaround to happen within a year or 18 months of this consolidation. “With any other player coming in who is not already in aviation, the industry would get more fragmented and with every player pumping in more and more money, the bleeding would have continued,” says Ramaswamy. Now, new players will think twice before coming in. CAPA’s Kaul — who had predicted this consolidation of the industry as early as last June — echoes this view.

There are lessons for all three protagonists in this episode. For Ambani, the lesson may be that not everything is for sale and at times being content with less may be the better strategy. For Gopinath, it is that successful airlines are not built on passion alone. As for Mallya, persistence certainly pays.