Deccan (airline)
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| Deccan | ||
|---|---|---|
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| IATA DN |
ICAO DKN |
Callsign DECCAN |
| Founded | August 25, 2003 | |
| Hubs | Bengaluru International Chhatrapati Shivaji International Indira Gandhi International |
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| Focus cities | Chennai International Hyderabad International |
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| Fleet size | 41 (+57 orders) | |
| Destinations | 65 | |
| Parent company | United Breweries Group | |
| Company slogan | The Choice is Simple | |
| Headquarters | Bangalore, India | |
| Key people | G. R. Gopinath Vijay Mallya |
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| Website: www.flyairdeccan.net | ||
Deccan is an airline based in Bangalore, India. It was India's first low-cost carrier. Its main base is HAL Bangalore International Airport, with a secondary hub at Chennai International Airport, Chennai.[citation needed]
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[edit] History
Frmerly known as Air Deccan the airline is operated by Deccan Aviation.[1] It was started by Captain G. R. Gopinath and its first flight was launched on 23 August 2003 from Bangalore to Hubballi.[2] It was known popularly as the common man's airlines, with is logo showing two palms joining together. The dream of Captain Gopinath was to enable "every Indian to fly at least once in his/her lifetime." Air Deccan was the first airline in India to fly to second tier cities like Hubballi, Madurai and Visakhapatnam from metropolitan areas like Bangalore and Chennai.
On 25 January 2006, Deccan filed a red herring prospectus with the Securities and Exchange Board of India. Deccan plans to offload 25% of its stake in the initial public offering (IPO) planned for late March or early April.[clarify] 24.5 million equity shares of ten rupees each will be divested at a price to be announced later to raise Rs Cr ($250-300 million) The proceed from the IPO will be used to set up a training centre in Bangalore and a maintenance facility in Chennai. However, due to stock market downturn, Air Deccan's IPO barely managed to scrape through (after extending the issue closing date), but it was a flop on listing. Its shares were listed at a discount of about 50 per cent to the issue price of Rs 148.65-levels.[citation needed]
Although it has not yet been formally announced, Deccan has switched to US-based airline reservations hosting service provider Radixx International[3] effective in late February, becoming the second major domestic Indian carrier to switch to the Radixx Air Enterprise system. The Deccan website currently states, "Air Deccan had migrated to an upgraded reservation system, on the 27 February 2007. This system aims at offering more efficient and User friendly services to our passengers..."[citation needed]
On 19 December 2007 Air Deccan and Kingfisher Airlines decided to merge. Kingfisher will effectively merge into Deccan Aviation following which Deccan Aviation will be renamed 'Kingfisher Airlines'. The merger will be effective April 2008, Vijay Mallya will be the Chairman and CEO of the new company, while G. R. Gopinath will be its vice-chairman. The move also allows Kingfisher to bypass the 5 year wait to fly to international destinations. It is believed that Deccan will fly to the Gulf and Southeast Asia, while Kingfisher will reserve Europe and North America.[4]
The company is currently owned by Deccan Aviation (~52%) and the United Breweries Group (~46%)
[edit] Destinations
- Further information: Deccan destinations
[edit] Future destinations
Deccan plan to launch international services to Gulf, SAARC[clarify] and Southeast Asia in the future on the following proposed routes[5]:
- Amritsar - Sharjah
- Bangalore - Bangkok, Kuala Lumpur, Dubai, Singapore, Colombo
- Chennai - Colombo, Dubai, Singapore
- Delhi- Dubai, Lahore, Kathmandu
- Goa - Dubai
- Hyderabad - Jeddah, Kuwait
- Kolkata - Dhaka, Yangon
- Mumbai - Dubai
[edit] Fleet
The Deccan fleet consists the following aircraft (as of February 2008):
- 23 Airbus A320-232 (plus 57 on order)
- 9 ATR 42-500
- 9 ATR 72-500
As of May 2008, the average age of the Deccan fleet is 4.4 years.[6]
[edit] Aircraft orders
- The airline has ordered 30 new ATR 72-500 aircraft (half to be leased), along with 3 secondhand ATR 42-500s and 3 secondhand ATR 72-500s. Deliveries will begin in May 2005 and be spread over a five year period with 6 to 8 aircraft delivered each year. As of June 2005, two of the 30 aircraft have been delivered.[citation needed]
- On January 3, 2006, Deccan placed a further order of 30 Airbus A320 aircraft taking their total orders of A320s to 62, to be powered by International Aero Engines V2500 engines.[citation needed]
[edit] Competitors
Deccan's phenomenal growth spurred the entry of more than half a dozen low-cost air carriers in India. Deccan faces stiff competition from SpiceJet, Indigo and GoAir. The growth of these low-cost air carriers has also forced mainstream Indian airliners like Indian Airlines, Jet Airways, Kingfisher Airlines, and Jet Lite (formerly Air Sahara) to lower their fares. However, there is a lot of scope for the growth of the airline since the Indian air industry continues to remain largely under-penetrated. Moreover frequent delay and cancellation of Air Deccan flights is leading to customers going to other budget airlines.
[edit] Revenue
Deccan has reported a sizeable net loss for the first reporting period since it became a publicly traded company.
In a statement to the National Stock Exchange of India it reported a net loss of Rs 3.4 billion ($74 million) for the 15-month period between 1 April 2005 and 30 June 2006. It originally hoped to break even in the current financial year but executives are quoted in the local media as saying it now does not expect to post profits until 2008 as a result of intense competition following the launch of several other new airlines. Air Deccan has now turned profitable on the back of a strong October-December 2006 quarter, posting a profit of Rs. 9.64 crores (a little more than US$ 2 million).[7]
[edit] Deccan Acquisition
Kingfisher Airlines parent company United Breweries Group's acquired 26% of Air Deccan parent Deccan Aviation (ATWOnline, June 1), including, that the promised offer to acquire an additional 20% of Deccan will be priced at the same INR155 ($3.82) per share. The initial stake cost UBG INR5.46 billion. UBG will be the largest shareholder in Deccan and will nominate three directors to the 12-member board. The combined fleet of 71 A320 family and ATR aircraft will operate 537 flights to 69 Indian cities, "whilst taking advantage of unparalleled synergy benefits arising from a common fleet of aircraft," according to Kingfisher. "For the near future, Kingfisher will continue to serve the corporate and business travel segment while Air Deccan will focus on serving the low-fare segment, but with improved financial prospects for both carriers," Kingfisher said. Speaking to reporters yesterday, UB Group head Vijay Mallya said there were no plans to launch an IPO "at this stage" and that UBG would have no problem funding the acquisition.
[edit] Rebranding
In October 2007, Air Deccan as a planned makeover after the acquisition was renamed as Deccan with is tagline "The Choice is Simple" based on its previous famous tag line 'Simplifly'. The old logo of hands has been replaced by the Kingfisher logo and the font of Kingfisher is also being used. The old colors of yellow and blue have been replaced by Kingfisher Airlines's red and white to give a 'premium' look and feel.[8] The check-in counters at airports as well as the crew uniform, will now have the same red and white colors. The new look airline is also promising excellent excellence in timely performance,Wider Network and " Little Delights all the way ". "Check-in staff will no longer be outsourced but the service will be managed by airline employees. This will increase accountability and improve service delivery," Mr Mallya, who has also said the airline will slowly replace the old ATR 42 aircraft and the ageing A320 planes, and replace them with entirely new aircraft.[9] There is also an expected change in the schedule of the airlines to match that of Kingfisher Airlines.
According to agencyfaqs.com, the re-branding is expected to cost around Rs 15 crore (approx. $3.8m). It is also speculated that MarketGate Consulting Pvt. was involved in the re-branding process.
[edit] External links
[edit] References
- ^ About Us. Retrieved on 2008-05-28.
- ^ "Air Deccan plane catches fire after flag-off", The Hindu Business Line, 25 September 2003. Retrieved on 2007-03-28.
- ^ Radixx International
- ^ Kingfisher to merge with Air Deccan
- ^ Kingfisher-Deccan prunes global plan
- ^ Airline fleet age
- ^ Deccan Aviation (January 25, 2007). "Deccan Aviation declares profit for Q2 FY07" (PDF). Press release. Retrieved on 2007-03-16.
- ^ Dance with Shadows (September 11, 2007). "Air Deccan to undergo makeover". Press release. Retrieved on 2007-10-27.
- ^ "Mallya touch: Deccan to fly red & white all the way", The Economics Times, September 4, 2007. Retrieved on 2007-10-27.
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