Is Kingfisher buying stake in Air Deccan?

Mumbai: Over the last couple of weeks, investment banking circles and brokers on the stock market have been trading stories of how Vijay Mallya’s Kingfisher Airlines is in talks to either acquire a controlling stake or buy out Air Deccan. Capt G Gopinath, MD, Air Deccan, who is currently in France, said nothing is on. Vijay Mallya, who company officials said is at ‘‘an undisclosed location outside India’’ could not be contacted.
Sources though said that over the last one week, a high-level team from Kingfisher has parked itself at Air Deccan’s headquarters in Bangalore. Ostensibly, to study the latter’s balance sheets and take a call on whether the airline makes sense for Kingfisher.
During the last quarter, Air Deccan lost market share and slipped a notch from its No 2 spot. For the same period, it also posted losses of Rs 212 crore. Capt Gopinath said this was because the airline was losing Rs 400 on each seat.
This number, sources said, is under scrutiny and will decide which way the deal will go. They said Kingfisher is comfortable with a loss of up to Rs 600 per seat. This is because Kingfisher believes it has the muscle to tide over this loss until the time fortunes in the airline business change.
03/05/07 Manju V/Times of India

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Categories: Air Deccan May 2007, Kingfisher May 2007