UB’s foreign ambitions face brand new worries

New Delhi: The ambitions of Kingfisher Airlines Ltd to fly overseas have run into fresh regulatory trouble with the ministry of civil aviation ruling out a proposal by the firm that it operate two brands, Kingfisher and Simplifly Deccan.
UB acquired Deccan Aviation Ltd, which runs India’s largest low-cost airline operation by passengers flown, and the merger of Kingfisher Airlines with Deccan is expected to close this month.
The young Kingfisher Airlines will turn three later this summer, while Deccan Aviation, which the UB group plans to use as its vehicle for its foreign flights, will complete five years of operation in August.
According to that plan, most of Kingfisher Airlines’ current business will be spun off and merged into Deccan Aviation and the new entity later named Kingfisher Airlines. That way, the new entity will have satisfied the five-year mandatory experience requirement and be eligible for a licence to fly overseas.
The problem that has now arisen is that Indian aviation rules do not allow a firm that holds a licence to operate an airline from running two or more brands of aviation services. So, for instance, Jet Airways (India) Ltd, India’s largest airline group by passengers flown, runs two brands —Jet and JetLite—by keeping them separately under two operating entities.It still retains the licence of Sahara Airlines Ltd, which it bought in February 2006, in a separate firm called JetLite Ltd.
Though a senior UB group executive said the matter to retain or not to retain the Deccan brand was under evaluation, the government has ma-de it clear that only one brand can stay.
07/04/08 Tarun Shukla/Livemint

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Categories: Deccan Apr 2008, Foreign Apr 2008, Kingfisher Apr 2008, New Apr 2008