Deccan, Kingfisher to run as two separate entities post merger

Deccan, Kingfisher to run as two separate entities post merger

New Delhi: Deccan Aviation, the low cost carrier in which UB Group has picked up 46% stake, on 5 December said Kingfisher and Deccan will run as two separate brands even when the two airlines are merged.

“The two airlines will be operative as two separate entity and we will only concentrate on rebranding the two carriers," Deccan Aviation Executive Chairman Captain Gopinath told reporters here.

Earlier this year, the UB Group had acquired 26% stake in Deccan Aviation for Rs550 crore. The group has now increased its stake to 46% by buying shares in an open offer.

Vijay Mallya led UB Group would run as full service airlines post merger and Deccan would operate as a low cost carrier.

“Deccan has been a household name since its inception two years back and to attain synergy in operation, post merger Kingfisher will operate as a premier carrier and Deccan as low fare airline," Gopinath said.

Last month the airline had appointed management consultancy firm Accenture to study the possibility of integrating the operations of the entities.

“We are presently focusing on integrating the resources of the two firms. Accenture is expected to come out with the report within two months, after which we will be able to comment on the merger issue," Gopinath added.

However, the benefits of the synergy would be visible only after 3-6 months, he said.

The study would look into areas like integrating the manpower and elimination of duplication of manpower or services. Effective deployment of personnel and looking at the services offered at various points would be looked into.

Deccan, which currently operates in 66 destinations has a fleet of 10 helicopters and ‘two fix wing´ aircraft deployed across eight bases and covers a range of activities like helicopter tourism, aerial coverage of sports events, heli skiing and rapeling, logistic support for offshore oil exploration, power line survey, film production among others.

Online ticketing portal has tied up with Deccan for a promotional campaign, to which audit firm KPMG was the process validator.

When asked whether the burden of the hike in fuel surcharge would be passed on to the customer, Gopinath said, “The fares will go up in near future but Deccan will continue to operate as a low cost carrier and post fare hike it will still be the low cost carrier."