AVIATION NEWS                                      Back To Index Page
Apr 2007

Air Deccan, ADAG tie-up not yet confirmed

     Mumbai/Bangalore/New Delhi: A newspaper report of the Anil Dhirubhai Ambani Group (ADAG) acquiring 26 per cent stake in, India's fastest growing low cost airline, Air Deccan, is yet to be confirmed. Vijaya Menon, Corporate Communications Head at the Air Deccan headquarters in Bangalore told ANI : "We are in a preparatory process and right now the name of the companies cannot be made public." On the amount of capital the company is expecting to raise from the market, Menon said: "It would be somewhere between 50 to 100 million dollars." A senior official of the Directorate General of Civil Aviation, speaking on the condition of anonymity, told ANI: "It had nothing to do with such business propositions, and acted only as regulators." The job of a regulator was to ensure that aviation firms abided by laid down rules, he further said. According to the newspaper report, ADAG is carrying out a due diligence of Air Deccan. An ADAG spokesperson also refused to make any statement on the issue. ADAG's probable investment in Air Deccan is expected to give a big boost to the airline's market share, besides broadening its base.

     Anil's Reliance Mutual Fund has already increased its share in Air Deccan from 3.43 per cent to 4.65 per cent. It is expected that with a entry of a strong company like ADAG, Air Deccan could change the market dynamics of the aviation sector. The airline is very eager to give a boost to its various divisions including cargo, MRO (maintenance and overhaul organisation) and a helicopter charter unit into separate companies. On April 9, Deccan had won the Excellence Award for the Best Low Fare Airline in India for the year 2006 instituted by the Air Passenger Association of India (APAI). As on November 2006 market figures, Air Deccan is the fastest growing low cost airline with a market share of 19.7 per cent. The airline currently operates a band new fleet of 18 Airbus A - 320 aircraft, with an average age of 1.5 years and 23 ATR Turboprop aircraft. Since its inception in August 2003, Air Deccan has carried over 8.7 million passengers and the numbers are growing everyday. The airline has recorded an on time performance of (within 1 hour) of 97.16 per cent for January 2007. Air Deccan shares rose about 4.97 percent on BSE (Bombay Stock Exchange) and 5.01 per cent on NSE (National Stock Exchange) till 2:20 p.m. on Thrusday, with its price over Rs. 114 in the secondary markets and market capitalisation of over Rs. 1, 142 crore. The stock has risen 15.7 per cent in the past week and 7.7 per cent in the past month.
-Apr 19, 2007