India’s largest private airline, Jet Airways, and its bitter rival, Kingfisher agreed to forge a cost-saving operational alliance, as Indian carriers struggle to survive the squeeze of rising expenses and declining passenger traffic.

The deal between the two publicly traded carriers, which together command about 50 per cent of the country’s aviation sector, could lead to better co-ordination of domestic routes, with avoidance of overlapping schedules, and might enable them to again raise premium fares.