The Hindu Business Line : Deccan Aviation Q2 net profit at Rs 9.6 cr

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Bangalore Jan. 26 Deccan Aviation, which owns low cost carrier Air Deccan, has posted a 19 per cent increase (sequential basis) in turnover at Rs 637 crore and a net profit of Rs 9.64 crore for the second quarter ended December 2006. The company's financial year is from July to June.

The $30-million (Rs 132 crore) infusion straight to the bottomline of the company, from the $100 million funding it received last year, through an innovative financing deal, accounted for a major part of the net profit.

Other factors such as fall in the cost per seat km by 17 paise and fuel prices by 18 per cent have also contributed to the higher net. The company during the quarter levied a fuel surcharge of Rs 750 per seat.

The composite yields recorded a 9.55 per cent growth despite a 15 per cent increase in the seat capacity over Q1. The company has posted a net profit of Rs 9.64 crore compared with a loss of Rs 42.94 crore in the first quarter. The company has achieved a market share of 19.7 per cent and is the country's second largest airline.

The Air Deccan Managing Director, Capt G.R. Gopinath, said during the previous quarter, other income contributed substantially to the bottomline but during the quarter ending December 2006, the company has been able to make real profits, which was a significant achievement.

"One way to look at it is that we have a long way to go as we need to make absolute profits (operating profits). But then we have started turning around now," he said.

If the airline is able to make Rs 4,900 per ticket at 80 per cent seat factor, it can turn profitable straightaway. However, it manages to make Rs 4,400 per ticket now. "We have to find a way to make an extra Rs 400-500 per ticket and we could sail through," he said.

Capt Gopinath said three years ago, only about 13 million passengers flew and today it has gone up to 30 million with Air Deccan alone flying 8 million passengers.

"We need to look at the big picture. We need to make 150 million-200 million middle class to make flying their part of lifestyle or work culture". He said the airline's average load factor was around 73 per cent and it has achieved over 98 per cent (within 1 hour) on time performance.

Seating Capacity

Mr Mohan Kumar, Director-Finance, Deccan Aviation, said: "Our second quarter revenues have increased by 19 per cent. This has been possible mainly on account of being able to control our costs. Our cost per seat km is Rs 3.18, which is among the lowest in the country. Our average yield per passenger was Rs 2,615 this quarter compared with Rs 2,512 in the quarter ended December 2005 despite a significant increase in seat capacity."

During the quarter, Air Deccan inducted four A-320s. It has added 24 new routes, 38 new flights and 6 new destinations including 3 monopoly sectors to its network this quarter.

The airline carried 16,45,362 passengers and launched its 8th aircraft base at Ahmedabad in November. It has on order 81 new aircraft to be delivered over the next six years.

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Deccan Aviation Q1 net loss at Rs 42 cr

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