Cabin crew schools eye IPOs, PE deals

Cabin crew schools eye IPOs, PE deals

Mumbai: Three firms that train cabin crew and other staff for India’s booming aviation sector are looking to sell shares as part of an initial public offering (IPO) next year to raise money to fund their expansion plans. Some of the firms are also wooing private equity (PE) funds.

Air Hostess Academy Pvt. Ltd (AHA), Frankfinn Institute of Air Hostess Training and Avalon Aviation Academy are the firms lining up IPOs. Apart from training cabin crew, these firms also train people in various aspects related to the functioning of airports and airlines, including ground handling, ticketing and customerrelationship.

Firms such as these three have emerged as a response to the growth in the aviation sector. India’s civil aviation minister Praful Patel recently said that the Indian aviation industry would attract an investment of around $150 billion (Rs6.06 trillion), and have a total fleet of around 1,000 passenger planes in the next five years.

“The demand for human resources in the Indian aviation space is going to be tremendous. In this context, we are planning to enter the capital market by early 2008," said Sapna Gupta, founder and director of New Delhi-based AHA. She added that AHA would be the first air-hostess training firm to be listed on the Indian bourses.

Air-hostess training firms that operate at the scale Indian ones do—Frankfinn has 65 schools across the country and AHA, 32—may well be unique to the country. The rush to set up such schools in the country is reminiscent of a similar boom in the early 1990s, when firms such as NIIT and Aptech set up IT training schools all over India to feed its growing software industry. Avalon is promoted by Aptech.

“We are looking to dilute around 20-25% of our equity through public issue. Besides this, we are talking to four Indian private equity players for a possible pre-IPO placement. This should be concluded by the end of this year," AHA’s Gupta said. However, she declined to name the private equity players, citing a confidentiality agreement.

AHA plans to open centres in Australia and the UK by next year. According to estimates by World Travel & Tourism Council, India will have at least 1.5 million openings in aviation and related industries by 2010. In 2007 alone, AHA estimates show, India’s private airlines will create 8,000 new jobs.

The Mumbai-based Frankfinn Institute is also in talks with private equity firms even as it prepares for an IPO by mid-2008.

“Several private equity players such as Tiger Fund have approached us for picking up a stake in our training institute," said K.S. Kohli, chairman of Frankfinn Aviation Services Pvt. Ltd, the parent firm of the training institute.

“We have not taken any decision to offer equity to private players, but we are lining up a public issue shortly to raise funds for expansion," Kohli added.

Mumbai-based Avalon Aviation Academy is also considering an IPO, according to a company executive who did not wish to be identified. The executive added that the company is not looking for PE investors. Preeti Malik, vice-president for aviation training at Avalon, declined to comment on the issue.