New Delhi: Cargo airline Deccan 360, the latest venture by aviation entrepreneur G.R. Gopinath, has deferred plans to sell a 25% stake until the next quarter, seeking to expand its network first to improve its valuation.
The idea is to “get operations started, have slots, infrastructure in place” to boost investor confidence in the company, Gopinath said on Wednesday after flagging off the first flight to Hong Kong from the Indira Gandhi International Airport in New Delhi.
Gopinath, who launched the venture with $25 million (Rs119.2 crore) of investment, said he was in talks with three strategic investors—two from the US and one from Europe. Talks with a Singapore-based firm have ended because of the economic slowdown.
“I am in talks, but we will wait for two-three months as operations get started and investor confidence improves,” he said.
The airline, run by Bangalore-based Deccan Cargo and Express Logistics Pvt. Ltd, had earlier this month said it plans to raise $30 million of working capital over the next six months. Deccan 360 launched its first flight between Delhi and Hong Kong with an Airbus SAS-made A310 freighter and plans to add two more A310s over the next four months to operate flights on three other sectors including Dubai.
Six years ago, Gopinath founded India’s first budget airline, Air Deccan, that was bought by Vijay Mallya’s Kingfisher Airlines Ltd in 2007.
Deccan 360 started international flights before beginning domestic operations because of depressed local demand as the economy endured a downturn. Initially flying twice a week, the cargo carrier will connect Dubai and Hong Kong with the Indian cities of New Delhi, Chennai and Mumbai.
Even the international cargo market is in a downward spiral. The International Air Transport Association in a statement on Wednesday said international cargo was down 21.7% in April year-on-year, with Asia-Pacific carriers showing a decline of 22.3% in the same month.