By Santanu Choudhury, Bloomberg
New Delhi: Deccan Aviation Ltd., the operator of India’s biggest low-fare airline, plans to raise as much $100 million to expand operations.
Deccan is in talks with private equity investors and will take a decision by the month-end, Vijaya Menon, a spokeswoman at the Bangalore, India-based company, said in a phone interview today. She declined to provide details.
Deccan, India’s first low-fare airline, raised 16 % less than targeted in an initial public offering last year. India’s airlines may raise more than $1 billion this fiscal year as they post losses due to growing competition, according to the Centre for Asia Pacific Aviation, an industry consultant.
Phone calls to Deccan’s managing director G.R. Gopinath and Chief Operating Officer Warwick Brady, seeking comment on the fund-raising plan, weren’t answered.
Indian carriers are raising money also to buy new planes from Airbus SAS and Boeing Co. as economic growth and rising incomes boost demand for air travel in the world’s second-most populous country.
Jet Airways (India) Ltd., the nation’s biggest airline, plans to sell as much as $400 million of stock in the next few months to fund a merger with rival Sahara Airlines Ltd. and buy new planes, it said on 16 April.
Shares of Deccan rose 4.5 % to Rs108.7 on the Bombay Stock Exchange today. The stock has declined 20 % this year.
Deccan Aviation, which runs the Air Deccan low-fare airline, raised 100 million in October from two European lenders by pledging the right to buy 60 Airbus planes it ordered.