Kingfisher's stake may bail out Deccan

Two weeks ago CNBC-TV18 had reported that Mallya and Deccan were keen on creating an alliance to take on Jet and it's new airline Jet -Lite.
Yesterday Chairman and Managing Director of Kingfisher Airlines, Vijay Mallya said the company is interested in picking up a stake in Air Deccan, reports CNBC-TV18.
Vijay Mallya and Captain Gopinath, MD, Air Deccan are being rumoured to be talking to each other for an alliance. The logic for the two to come together is imminent- especially after Jet has decided to convert Sahara into a budget carrier. So, it might be two big titans clashing in the sky.
Deccan Aviation needs all the help it can get. The low cost carrier is reportedly losing over Rs 2 crore a day and it has accumulated losses of Rs 700 crore in the last three years. Air Deccan had expected to break even in FY08, but that breakeven target has now been pushed to FY09.
Analysts are worried about the airline's rapidly depleting cash reserves. Though there is some money coming in from invested bank and two lease and sale back deals, a JP Morgan research report indicates Air Deccan has close to zero residual equity.
08/05/07 Moneycontrol.com

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Categories: Air Deccan May 2007, Kingfisher May 2007