IndiGo, a New Delhi-based low cost carrier (LCC), and Coimbatore-based business class airline Paramount Airways are in talks to join the Jet Airways-Kingfisher Airlines alliance to cut costs to overcome a downturn.

While IndiGo has had detailed discussions with the liquor baron and promoter of Kingfisher Airlines, Vijay Mallya, Paramount is in talks with executives of Jet Airways [Get Quote] for being part of the alliance. A Kingfisher spokesperson denied the meeting, though, sources at Jet Airways confirmed that Paramount is in talks with them for joining the alliance.

"We are looking at having an agreement with Paramount. The south Indian carrier can act as a feeder for Jet Airways and in turn Paramount will get access to the mainland metro traffic which it does not have access to currently," said a Jet Airways executive not wanting to be identified.

In an earlier interaction with Business Standard which took place a day after Jet Airways and Kingfisher Airlines announced the alliance, Paramount Airways' promoter, M Thiagrajan had said that he is watching the situation and then will decide on joining the alliance.

According to aviation experts, it makes sense for IndiGo to be part of the alliance, as it will result in substantial cost savings for the airline. Both, Kingfisher and IndiGo, have a common Airbus fleet and can maintain common engineering and maintenance facilities.

The Jet- Kingfisher alliance has a market share of around 60 per cent and if IndiGo and Paramount join the alliance, the share of the combine, will be close to over 71 per cent. While, IndiGo has a market share of around 10 per cent, Paramount commands about one per cent share. However, Paramount's market share in south is over 26 per cent and this would help Paramount to act as a feeder for Jet.

IndiGo has 19 aircraft in its fleet and has an order book of 100 aircraft with European aircraft manufacturer Airbus. Neither the airline nor the aircraft manufacturer have spoken about the fate of this order book.

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