The merger will create the largest player in the domestic aviation market and pave the way for Vijay Mallya to fly his Kingfisher Airlines to overseas destinations. Deccan Aviation will subsequently be renamed Kingfisher Airlines. Both the airlines are in the red. While Deccan Aviation reported a loss of Rs crore for the year ended June 30, , Kingfisher Airlines had a loss of Rs crore on its books for the year ended March 31,
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Mallya said he could come in as an investor in Air Deccan. Talks began a week ago, according to Gopinath, and the deal was finally struck at 4. Size matters in this cut-throat business and consolidation is the only way to stay afloat. In their coming together, the two players are a study in contrast.
Kingfisher is known to lavish its customers with the best of cuisine and comfort on board while Deccan would want its passengers to even pay for water. Deccan is a no-frills airline while Kingfisher would like to be known for luxury.
UB will spend Rs crore for this stake, at a price of Rs per share, roughly valuing Deccan, which has the second largest market share after Jet but before Indian Airlines at Rs 2, crore. Jet paid Rs 1, crore for the whole of Sahara. In return, UB will get a preferential allotment of equity shares.
Air Deccan has already received a pay order worth Rs crore, with the rest of the money expected to come within the next four weeks. As per SEBI guidelines, UB will now make an open offer to the other investors including the public and the non-promoters to buy additional stake in Air Deccan. Order Now more from times of india business.
Early years[ edit ] Kingfisher Airlines was established in It was owned by the Bengaluru based United Breweries Group. The airline started commercial operations on 9 May with a fleet of four new Airbus As operating a flight from Mumbai to Delhi. Its registered office was located in UB City , Bengaluru. The acquisition of loss-making Bangalore-based Air Deccan in made matters worse. However, having regard to improvement in the economic sentiment, rationalization measures adopted by the company, fleet recovery and the implementation of the debt recast package with the lenders and promoters including conversion of debt into share capital, these interim financial statements have been prepared on the basis that the company is a going concern and that no adjustments are required to the carrying value of assets and liabilities. Mallya indicated that his solution was for the government to reduce fuel and other taxes.