Air Deccan aims for top spot in crowded skies

Bangalore: Air Deccan, the discount carrier that opened air travel to millions of Indians, is counting on first-time fliers and small-town entrepreneurs to turn it into the country’s biggest airline.
“We will become the country’s largest people carrier in less than two years by offering the best low-cost product,” Managing Director G.R. Gopinath told AFP in an interview in Bangalore.
Now he wants to overtake Jet Airways, which last month increased its share of the expanding aviation market to more than 32% from about 25% by acquiring Air Sahara.
Jet, which is focusing on international routes, is trying to chip away at Deccan’s leadership of the budget travel market by positioning Sahara — renamed Jetlite — as a low-fare airline.
Air Deccan plans to achieve its ambition by adding more planes to its fleet of 43, building more hangars and logistics support hubs and taking its low-cost model to untapped markets by linking small towns.
To fund expansion, he plans to raise between $75 million and $100 million by selling up to 26% of the airline to an institutional investor.
Non-passenger revenue makes up about 7.5% of Air Deccan’s total revenue, a share it wants to raise to 30% in three years.
The company is also India’s largest e-commerce website, grossing as much as one-and-a-half million dollars daily from online ticket sales.
21/05/07 Anil Penna/AFP/Livemint

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Categories: Air Deccan May 2007