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May 2007

Kingfisher to pick up 26 percent Air Deccan stake

     Bangalore: The Vijay Mallya-owned Kingfisher Airlines is to pick up a 26 per cent stake in Air Deccan. The deal between the two airlines is said to be through.The alliance would have the largest market share in the industry and will pose a stiff challenge to Jet Airways, which recently bought out Air Sahara to cement its position in the domestic market. Captain G.R Gopinath, Managing Director Air Deccan said, "UB was preferred over other interested investors, due to the inherent synergies existing in Air Deccan and UB owned Kingfisher Airlines. Air Deccan would continue to operate as an independent airline with increased focus on the low cost business model. With commonality of fleet, we foresee sharing of infrastructure, resources and best practices between both the airlines. This would definitely lead to decreased costs, maximizing shareholder value, increased efficiencies and improved profitability." Capt G.R Gopinath would be taking over as the Executive Chairman and Dr Vijay Mallya would be the Vice Chairman. Kingfisher Airlines and Air Deccan will henceforth work very closely together to exploit the significant synergies that exist in the areas of operations and maintenance, ground handling, vastly increased connectivity, feeder services, distribution penetration etc. Warwick Brady - COO, Air Deccan after having completed two years with the airline has decided to move on. The new COO will be appointed shortly. India's fastest growing low cost carrier Air Deccan has the largest network in India today covering 65 airports, plying over 350 flights a day. The airline currently operates a band new fleet of 19 Airbus A - 320 aircraft, with an average age of 1.5 years and 24 ATR Turboprop aircraft.

    Since its inception in August 2003, Air Deccan has carried over 11 million passengers and the numbers are growing everyday. Since April onwards, talks of Kingfisher's interest in Air Deccan have been doing the rounds. But Deccan has been faithfully denying moves towards a sellout. There were also reports of a Kingfisher team visiting Bangalore, possibly to study the Deccan's balance sheets. Incidentally during the last quarter, Air Deccan lost market share and slipped from its No 2 spot. For the same period, it also posted losses of about Rs 212 crore. The airline industry has seen a growth of nearly 20 per cent in the last five years, primarily led by low-cost carriers. Kingfisher Airlines also announced the launch of daily services connecting Kolkata to Raipur and Indore. Mallya said: "Kingfisher Airlines has redefined the experience of flying and has come to be regarded as an airline that sets new benchmarks in service excellence for the industry. Through the launch of this new route Kingfisher Airlines reaffirms its commitment towards addressing the needs of its guests by providing connectivity between metros and mini-metros in India." Manoj Chacko, General Manager Global Sales, Distribution and Network Planning, Kingfisher Airlines Limited, said: "All our efforts are focused on offering our guests enhanced convenience in terms of connectivity and service. The introduction of these new routes is a step towards that. The business track of Kingfisher Airlines will grow by leaps and bounds through the launch of this route and we continue to strive in providing better services and connectivity to our travelers."
-May 31, 2007