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Air Deccan rules out sale to beer billionaire, Vijay Mallya

Air Deccan rules out sale to beer billionaire, Vijay Mallya
AFP
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First Published: Tue, May 08 2007. 10 24 AM IST
Updated: Tue, May 08 2007. 10 24 AM IST
Bangalore: Air Deccan, India’s largest low-fare carrier, on 8 May ruled out a sale to billionaire Vijay Mallya, saying a combination of the two airlines would make no cultural or business sense.
“He may want to buy the moon but the moon may not be available for sale,” Air Deccan chief G.R. Gopinath told AFP in Bangalore, a day after Mallya said his Kingfisher Airlines was interested in buying the no-frills airline.
“We are from different planets; he is from Venus, I am from Mars,” Gopinath added in the city where both airlines are based. “We are from the opposite ends of the business spectrum, consumer models and consumer space.”
“We are mining the bottom of the pyramid, he is picking the cream off the top.”
Gopinath, who is known to his airline employees as Captain Gopi, said there was “absolutely” no chance of Air Deccan selling a stake to Kingfisher.
“They can’t co-exist (in any merged entity),” he said. “One airline will only kill the other.”
Still the bespectacled, low-key entrepreneur said he got along well with Mallya, a flaymboyant tycoon who has named his airline after the flagship beer brand of his UB Group.
“We are good friends and enjoy drinking a beer together,” Gopinath said. “But that’s about all. Our vision and philosophy are totally different.”
Mallya said on 7 May in New Delhi, at a press conference with Airbus Industries, that he was interested in buying Air Deccan but an acquisition was not imminent.
Air Deccan last week denied media reports that it was in talks with Kingfisher Airlines.
The budget carrier reported a loss of Rs2.13 billion ($52 million) in the quarter ended March.
A deal would create an airline that would control 38% of India’s domestic aviation market, overtaking the 33% share of Jet Airways, which last month bought rival Air Sahara for Rs14.5 billion.
Jet Airways plans to turn Air Sahara into a budget carrier called Jet Lite to tap the low-fare segment that has contributed to 20% annual growth in India’s aviation industry over the past four years.
Analysts have predicted that a wave of consolidation in the airline industry is inevitable after the number of domestic carriers proliferated, leading air fares to drop sharply but squeezing profitability.
From just three in 2003, the number of airlines in India has jumped to 10 as the boom in air travel is expected to more than double the domestic market size to 60 million passengers by 2010.
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First Published: Tue, May 08 2007. 10 24 AM IST
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