The Hindu Business Line : Ladhani ready to invest more in Air Deccan

Tying up funds
"We have several friends and are now in talks with them for raising the money," said Mr Ladhani. He expected the funding to be wrapped up before the end of this month.

Bangalore May 8 The Vice-Chairman of Air Deccan, Mr S.N. Ladhani, whose initial funding led to the birth of India's first low-cost carrier, wants to plough more money into Air Deccan even as the carrier continues to lose at least Rs 2 crore every day. "It is my baby. I will invest more in the company," Mr Ladhani told Business Line. He, however, did not disclose how much he plans to invest further.

When Mr Ladhani, who is also a key bottler for Coca-Cola Company in India, initially funded the airline, his stake was as high as 76 per cent and post-IPO he and his family members own about 13.5 per cent. Mr Ladhani said apart from the company, he in his individual capacity was in talks with investors in the US for raising up to $100 million in the airline. "We have several friends and are now in talks with them for raising the money," he said. He expected the funding to be wrapped up before the end of this month.

`Funding no constraint'

Mr Ladhani explained that till now the airline had focussed on increasing its network and market share. Now the focus has shifted to profitability and hence a major route rationalisation was on currently, he said. He said some of the routes that are no longer profitable are being merged with others to increase their yields. For example, the flight to Kanpur had been merged with the Lucknow flight. He said if the airline is able to make between Rs 400 and Rs 500 per seat per km more, it would be on the road to profitability soon.

He said funding was never an issue for his company. "Whenever the airline wanted funds, we continued to pour in more," he said. He said the original business model of the airline when it commenced operations would have ensured profitability in two years itself. But constant increase in fuel prices and ballooning manpower costs had pushed back the profitability by a few more years. He said there was a possibility of reducing his stake if the equity base is expanded. He said the airline has 370 flights daily and the low-priced tickets are in fact good advertisements for the airline.

He ruled out any move of the airline to sell stake to Kingfisher Airlines. "Our mindsets are different. We are used to saving money while others are used to overspending," Mr Ladhani said.

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