Deccan brand will continue to be in business
Even if the country’s largest budget carrier Air Deccan is merged with Vijay Mallya’s Kingfisher Airlines, the Deccan brand will continue to be in business.
By TNN |
NEW DELHI: Even if the country’s largest budget carrier Air Deccan is merged with Vijay Mallya’s Kingfisher Airlines, the Deccan brand will continue to be in business. The budget carrier’s executive chairman GR Gopinath on Wednesday said people in India have felt the need of a low-cost airline and hence Deccan would continue to exist as a separate brand. The UB Group holds 46% stake in Air Deccan and is currently in the process of picking another 5% equity through creeping acquisition to take its holding to 51%.
“We and Mr Mallya have agreed to running Air Deccan and Kingfisher as separate brands. As far as merger or reverse merger of the two airlines are concerned, we have asked the global consulting firm Accenture to look into its possibility. We have also commissioned two-three more agencies to study the way of maximising the operational synergy of the two airlines. We received the report of one agency on Tuesday,” Mr Gopinath said.
Asked if airfare would go up Mr Gopinath said: “Fares have to go up by Rs 500 to Rs 1,000 but it doesn’t mean we will become a full service carrier. We actually need to increase airfare to return to profitability.”
The Deccan board of directors is expected to meet on December 19 to look into the Accenture study on the possibility of merging the two airlines and other issues such as minimising cost, rationalisation of routes and corporate restructuring.
The agency would also look into the aspect of eliminating duplication of manpower in the two airlines.
The Deccan board would take a decision on merging itself with Kingfisher or reverse merger in the next two-three months.
“We and Mr Mallya have agreed to running Air Deccan and Kingfisher as separate brands. As far as merger or reverse merger of the two airlines are concerned, we have asked the global consulting firm Accenture to look into its possibility. We have also commissioned two-three more agencies to study the way of maximising the operational synergy of the two airlines. We received the report of one agency on Tuesday,” Mr Gopinath said.
Asked if airfare would go up Mr Gopinath said: “Fares have to go up by Rs 500 to Rs 1,000 but it doesn’t mean we will become a full service carrier. We actually need to increase airfare to return to profitability.”
The Deccan board of directors is expected to meet on December 19 to look into the Accenture study on the possibility of merging the two airlines and other issues such as minimising cost, rationalisation of routes and corporate restructuring.
The agency would also look into the aspect of eliminating duplication of manpower in the two airlines.
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“Once Accenture submits its report, we and Mr Mallya would discuss it first and then finally the Deccan board would take a decision. The consulting firm is likely to give its report within two weeks,” said Mr Gopinath. The Deccan board would take a decision on merging itself with Kingfisher or reverse merger in the next two-three months.
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