The Hindu Business Line : Talk of reverse merger lifts Deccan Aviation

The Deccan Aviation stock rose over 23.23 per cent on Tuesday to Rs 191.5 on rumours that the company might go for a reverse merger with UB Group’s Kingfisher Airlines after delisting itself from the stock exchange. In its place, Kingfisher Airlines would list itself on the stock exchange.

The rumours rose from the news that Deccan Aviation which runs ‘Simplify’ Deccan might get clearance to launch its international operations as it completes the mandatory five years before it is allowed to fly foreign routes. As the UB group owns nearly 46 per cent stake in Deccan Aviation and is all dressed up to operate international routes, it wants to piggyback on the Bangalore-based airline to start its operations. Both Deccan Aviation and Kingfisher Airlines are currently going through a route rationalisation process.

International routes

The UB Group wants Kingfisher Airlines to operate international routes because it believes that Deccan with its image of being a low-cost airline may not find favour with the business travellers who bring in the big bucks for any international airlines. UB Group has already ordered for five A380s, which is currently the largest aircraft in the world and wants to deploy these to fly non-stop from India to the US. Kingfisher Airlines is positioned as a premium brand and hence the group believes that it is the right choice to fly international routes. While Deccan Aviation officials dismissed talk of reverse merger as speculative, a UB Group spokesperson declined to make any comments.

K. Giriprakash

K.S. Badri Narayanan

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