Kingfisher-Deccan take measures to meet saving targets

The Kingfisher-Deccan alliance proves that size matters. The two airlines that are targeting savings of Rs 300 crore in the first year of operation are now renegotiating deals with vendors that are at least 25% cheaper.
It's a sweet deal getting sweeter. The Kingfisher-Deccan combine seems to be negotiating with vendors to reduce costs. It's talking with aircraft makers about deals on engines for its 75 aircrafts and it's already managed to cut insurance costs.
But the big savings will come from shared infrastructure. Kingfisher and Deccan will share hangars in Bangalore and Hyderabad, saving a few crore rupees. The combine might consider combining office space in some cities where both have small offices. And substantial savings will come from rationalising human resources.
Deccan and Kingfisher are also working on cutting overlapping routes. About 25% of their routes are common. By the end of the year it will fall to15%.
The combined airlines are expected to save Rs 300 crore in the first year.
24/07/07 Moneycontrol.com

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Categories: Air Deccan Jul 2007, Kingfisher Jul 2007