Under government regulations, an Indian carrier ought to fly domestic routes for at least five years before getting clearance to fly abroad.

Among the other private carriers, the first to get there will be Air Deccan, which took off about two years ago. The other gains are the increase in market share by about 11 percentage points to nearly 50 per cent and infrastructure, including parking bays.

"The market share will give Jet immense clout in pricing, scheduling. The price seems to be justified, though I do not know Sahara's financials," said Munesh Khanna, a director with Mumbai-based Enam group.

However, there seems to be some scepticism over the Jet's valuation of Sahara, which resulted in the all cash acquisition of $500 million.

Perhaps reflecting the scepticism, the Jet Airways, which opened on National Stock Exchange today at Rs 1169.80, fell to Rs 1126.25 by the close, a loss of Rs 24.10 compared with yesterday's close of previous close Rs 1150.35.

"For a 10 per cent market share, Jet has valued Air Sahara at $500 million. Thus, Jet has valued Air Sahara in line with its own valuation. Air Sahara's operations are not as efficient as Jet's,' said brokerage house SSKI. Interestingly, the investor community is not very impressed by the increase in Jet's market share to nearly 50 per cent.

For the year ended March 2005, Jet reported a 140 per cent increase in net profit to Rs 392 crore (Rs 3.92 billion). Air Sahara, on the other hand, is expected to end this financial year with a net loss of Rs 17.5 crore (Rs 175 million).

Some analysts believe that Jet's attention, which ought to be focused on ramping up its fledgling international operations, may be distracted by the task of having to turn around Air Sahara.

Already, Jet is facing competition from new low-cost airlines. Then, Indian Airlines is poised to acquire a new fleet this year, along with a new attitude. That will take care of the fiercest criticism of the state-owned carrier.

A large part of Air Sahara's capacity is deployed on the lucrative routes, such as those connecting the metros. Jet covers all of those already. Thus, there maybe a frequency overlap on several routes.

"Thus, the advantage from buying out incremental 11 per cent market net addition to Jet's portfolio will be limited," said SSKI, adding that Jet's dominant share will at best hamper the competition's ability to ramp up.

Sahara has not really proved to be much resilient. Faced with mounting competition, it quickly slipped into the red. It had ended last year with a profit of Rs 31.7 crore (Rs 317 million).

It remains to be seen how quickly Jet can align Sahara's cost structure with its own.