Crossing Sahara with the mother brand

MUMBAI: It’s official. Air Sahara, the aviation brand, will be grounded post the melding of Sahara Airlines with the more tish-tosh Jet Airways.

Up in the air with this merger and acquisition, however, are questions related to the brand and its mother brand Sahara. Discussion and rhetoric pans over everything from: was the entire deal, and the brand, inherently over-valued?

What values do the Air Sahara brand, and intrinsically the mother Sahara brand, really stand for in mind spaces? After all, though Air Sahara may be off the radar, brand Sahara still bats across a medley of sectors—from its start-off in the non banking financial sector, to entertainment, malls, real estate, golf et al.

First, a zoom on brand Air Sahara. It was a given, that Jet would not lug the weight of the Air Sahara brand behind it. Says Harish Bijoor, CEO, Harish Bijoor Consults: Sahara is an umbrella brand. Air Sahara is about brand Sahara per se — it’s a subset of brand Sahara, which is widely diversified and with all kinds of suffixes and prefixes attached to it.

By brand Sahara demerging one of its high-profile entities, it doesn’t lose anything. Also, the brand is a liability to Jet and it makes sense to drop it.

Alok Sharma, executive vice president, Air Sahara offers another take. They (Sahara group) would not want the brand to be used or managed by someone else and that’s the reason the Air Sahara brand will be dropped post merger, he says.

The values associated with Sahara the brand per se? “Pretty rustic, not very classy, functional, reasonable value-for-money,” says Bijoor. In the aviation space, they tried to smoothen the rough edges but couldn’t, thanks to the plethora of value deals and super sixers they winged on. The brand was clubbed with, or perhaps notched below Indian (Airlines) in value perception. In relief, the Jet Airways brand is about class, an impeccable degree of worldclass service, awards etc. It’s seen as the expatriate and white man’s airline, he adds.

On similar note, Nikhil Garg, analyst, Edelweiss Capital, opines that Air Sahara, in terms of perception, clearly carries negative brand connotations in terms of service etc. So why invest more in that brand, which is not working well, and carry that burden forward, he queries.

Sharma’s view differs: “We are a strong Indian brand which puts a lot of focus on customer service, employee bonding etc. We had even adopted the Indian tricolour on our planes (tails). If there was a problem with the brand, why would leading airlines like American Airlines and British Airways have associated with us?”

What we’re really seeing is just another manifestation of the two-minute, Nescafe world we inhabit. Short-term interest in brand building is proving very lucrative and is prevalent across services, geographies and sectors. It’s simple: build a brand short-term, and then kill or sell it at an astronomical price, say analysts. Sharma thinks not. “We’re leaving it (the brand) at our peak, as a profitable airway.”

Have the brand, and the airline itself, been overvalued in this deal? Some consultants nod yes. “There was a big valuation exercise done on Sahara the brand, which is about its physical assets, and its intangibles—which are not very hot anyway,” says one brand consultant.

And of course, there’s the now-famous analysis from Kingfisher Airlines big boss, Vijay Mallya: “Kingfisher Airlines evaluated the potential acquisition of Air Sahara but concluded that the valuation expectations were too high. Even though the initial value expected was between $750 million and $1 billion, this expectation subsequently dropped to $500 million. Even at this price, Kingfisher Airlines/The UB Group concluded, after due consideration, that it was not worth pursuing the acquisition of Air Sahara at this price.”

In Sharma’s view, though, an established and financially prudent player like Jet has put a value, and this has more credibility than anything else.

Another poser: following Sahara’s merger with the ritzier Jet, could there be any positive rub-off on the Sahara brand in other sectors? None whatsoever, avers Bijoor: ``The daughter has been given away in this marriage and the in-laws (Jet) don’t want anything to do with the rest of the family.” Garg agrees.

In his opinion, there are no synergies present, in terms of the current sectors the Sahara brand is operating in, so there will be no rub-offs

Interestingly, brand Sahara will still pitch on the cricketing field in terms of sponsorships. “Cricket sponsorships worked wonderfully for the brand and made it become `iconic on icons’ (for the moment). End of the day, cricket is still a rustic game and the common man’s delight,” says Bijoor.

For some recap: it’s par for course for companies to shed their images and brands at the propitious time and price. On home ground, Oberoi hotels morphed into a Hilton, though the latter is not perceived as swank and premium as the former brand, notes a consultant. Worldwide, American Airlines took over National Airlines and plonked the acquired brand.

On our air strip, however, early private wingers like Modiluft, Damania, NEPC closed down and their brands died with them. Finally, public memory is short. So, it makes sense for acquisitive companies to journey light, discard unwieldy cargo, and cherry-pick the values and brands that can weather the long haul. That’s called smart business travel.