Deccan may beat Kingfisher to profit

In what can only be termed a twist of fate, financially beleaguered Air Deccan, which was forced to sell 26 per cent to Kingfisher Airlines chairman Vijay Mallya’s UB Holdings to keep its head above water a few months ago, is likely to break even before Kingfisher.
Confirming this, A Raghunathan, Kingfisher’s chief financial officer (CFO), said with better revenue management and improvement in yields at which seats were being filled up, Deccan, one of India’s first low-cost carriers, should break even by the last quarter of this financial year (January-March).
Kingfisher’s losses, which were around Rs 400 crore in 2006-07, are likely to be halved in 2007-08. On domestic operations alone the breakeven is likely to be achieved in 2008-09. But with the start of international operations (which it hopes to begin in April 2008), the full breakeven could be pushed back a bit.
In the case of Deccan, Raghunathan said the “scope for improvement is larger”. The gap in cost and revenue per passenger was Rs 400-500.
Close to Rs 300 of this has already been bridged through both the congestion and fuel surcharges.
04/09/07 Anjuli Bhargava/Business Standard

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Categories: Air Deccan Sep 2007, Kingfisher Sep 2007