The Hindu Business Line : Air Deccan expects to break even before 2008-end

Plans ahead
The company is extremely bullish on its alliance with Kingfisher.
The airline will take a closer look at the fare buckets, including low fares.
It may raise up to Rs 50 crore for guarantees for purchase of aircraft at an appropriate time

Bangalore June 11 With funding from UB Holdings, Air Deccan now expects to turn around much sooner than it had anticipated earlier.

"We are likely to turn profitable during the next few quarters," Air Deccan's officiating CEO, Mr Ramki Sundaram, told Business Line.

He added that the amount of Rs 550 crore which will be given by UB Holdings for 26 per cent stake in the airline's parent, Deccan Aviation, will be utilised for working capital requirements and for retiring certain debts.

Mr Sundaram said that the airline's board is convinced more than before that it took the right step in offering stake to UB Holdings.

"With each passing day, I get the feeling that we came out with the right decision."

According to him, the company is extremely bullish about the alliance. "Even though it is early days yet, we are learning a lot from each other. There are a lot of synergies."

Air Deccan had earlier said that it would break even towards the end of 2008. "Our foremost goal is to break even."

Mr Sundaram, who is also the airline's CFO, said that the airline will take a closer look at the fare buckets, including low fares.

"We will look at it more closely. Our pricing strategy will be determined by profit motive. We will study rationalisation of our fare structure."

The airline will continue to have certain low fares but will make judicious use of it wherever possible; the emphasis will be on rationalisation of routes.

According to him, the airline may raise up to Rs 50 crore for guarantees for purchase of aircraft at an appropriate time.

Though the airline has been looking for additional funds, it does not indicate a fund crunch, he added. "We had our plan C or even plan D."

According to him, the existing shareholders had promised to pump in more money in the event of the airline not being able to raise funds.

"We were not exactly sitting on top of the world. But we had alternative plans ready if plan A or B had failed."

Mr Sundaram also said that the deadline to pay back Rs 200 crore to SBI was not May 31, 2007 but September 31, 2007.

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Air Deccan expects to break even before 2008-end