Low cost carrier Air Deccan has signed a term sheet with a consortium of foreign bankers to raise 100 million dollars towards its working capital for the next 22 months. Disclosing this to newspersons here after the Board of Directors meeting, Deccan Aviation Managing Director Capt G R Gopinath said the legal documents were being prepared and four or five banks were involved in the process. The money raised would be used for aircraft funding and development of routes, he added. Giving the company’s financial details for 15 months from April 2005 to June 2006, he said Air Deccan posted Rs 1,352 crore turnover in the period as against a turnover of Rs 320 crore during the last financial year. The net loss was around Rs 340 crore. The overall financial performance for the period was impacted by various factors, including increase in fuel and input costs, introduction of 20 new aircraft and addition of 56 new routes, besides rising personnel costs, he explained. He said the company was working on innovative financial structures to strengthen its finances and support the growth strategy. The next 12 months would see fierce competition with the entry of new players, he noted.
Capt Gopinath said the company focussed on five key issues to tide over immense competition, which included working relentlessly to world class standards, ensuring operation of 75 per cent of the sectors as against the current norm of 42 per cent mature flights and ushering in significant changes in perception and ensuring ’high yield customers’ to fly. A world class hangar would be ready in Chennai by December, he added. He regretted that the Indian Airlines had indulged in ‘‘predatory tactics’’ by reducing its cost by half in all sectors in the last two days. ‘‘We ensure that the Government gets its revenue even after selling our tickets for Rupee one, but this is the kind of treatment we get ultimately,’’ he rued. Company Chief Finance Officer Mohan Kumar, who was also present, said a well planned growth strategy was in place to tap the potential available in the country. Simulators would be installed in Bangalore to train pilots, he added. He said the overall cost of fuel was 34 per cent a year ago, which rose to 42 per cent now. It was likely to come down in October. ‘‘If we can manage 400 flights a day through 50 aircraft as against the present 275 flights a day involving 38 aircraft, then we can think of profit.’’ Mr Kumar said the debt as on date was Rs 400 crore, of which Rs 160 crore was towards purchase of aircraft and Rs 214 crore was capital debt of three aircraft. He said the airlines had sold over a million seats under less than Rs 500 per ticket category since its inception. The company had a market share of 21.2 per cent and was growing by half per cent every month.
Gopiji probably upset that IA has increased its market share by 1.2% according to the latest DGCA figures. The latest DN advt has in small print against its claim of bieng No. 2 that is was the figures computed in June 2006!!!!
Why would Capt. Gopinath complain about Indian Airline pricing? Business is business.
There is also an interview with him and Brady in the latest Business World, which brings out his arrogance towards pretty much everything - passengers, competition, infrastructure, the works.
Nothing justifies rude behaviour towards passengers, and that is the first lesson Air Deccan needs to impart.
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Starboard Side emergency reclining window please, thank you, and the lounge card, if you don't mind?
Air Deccan ties up with Hughes for online ticketing
New Delhi, Oct 5 (UNI) Leading low-cost carrier Air Deccan today said it had tied up with broadband and satellite network provider Hughes Communications for offering online ticketing services.
The alliance will facilitate deeper market penetration for Air Deccan by making reservation available through Hughes’ 215 net fusion centres in 105 cities, which are satellite based multi service superstores, the airline said in a release.
Currently, 39 centres across 28 cities are already offering this service as part of the first phase of the project, it added.
KTDC, Deccan Aviation ink MoU for helicopter service
Thiruvananthapuram, Oct 4 (UNI)
The Kerala Tourism Development Corporation (KTDC) today signed a Memorandum of Understanding (MoU) with the Deccan Aviation to launch helicopter service, to give the tourists double benefit of cutting down travel time, while enjoying a bird’s eye-view of the unique beauty of the state.
The MoU was signed between KTDC Managing Director K G Mohanlal and Deccan Aviation Executive Director Col Jayanth Poovaiah here. State Minister for Tourism Kodiyeri Balakrishnan, KTDC Chairman Cherian Philip were also present on the occasion.
A relase said here this service also offered advantages for corporate travellers, who wanted to mix leisure with business. A helicopter had been stationed at the Thiruvananthapuram airport, and it could accommodate up to five passengers.
The KTDC had already launched a package connecting Kovalam-Kumarakom-Thekkady-Munnar-Kochi-Thiruvananthapuram and was charged Rupee five lakh, which included helicopter charges, local transport and food and accommodation for five people.
The ’Bird’s Eye view’, another package for five people, covering beach, backwater and hill station would charge Rs 35,000, the release added.
Air Deccan in talks with GMR, state govs for low cost airports New Delhi, Oct 13 (UNI)
Leading no-frills carrier Air Deccan today said it was in talks with infrastructure developer GMR Group, the Andhra Pradesh and Karnataka governments for constructing low cost airports. ‘‘We are in preliminary discussion with GMR Group asking them to build low cost airports,’’ Air Deccan Managing Director Capt G R Gopinath told reporters in a video conference from Bangalore. He, however, clarified that the airline would not be participating financially in the develpoment of such low cost airports. ‘‘We will assure direct daily connections to these places,’’ he said. Gopinath also said he had approached Andhra Pradesh and Karnataka Governments to build airports for low cost carriers in these states. ‘‘Our officials have met the Andhra Pradesh Chief Minister and expressed our views on the need for low cost airports and submittted a master plan,’’ he said. The Andhra government has in principle agreed to develop three such airports in the state. ‘‘Our request to them was to treat it (the airport) as state subject. Within six to 12 months they should be able to put these airports,’’ he added. A similar proposal was also mooted to the Karnataka government, he said, adding that the airline executives would meet the state government officials in this regard next week. Gopinath said he also met with Left party leader Nilotpal Basu for the revival of Cooch Behar airport, although he has not met the West Bengal Chief Minister.
India’s biggest no-frills carrier raises 100 million dollars
BANGALORE, India, Oct 13, 2006 (UNI)
India’s biggest low-cost airline, Air Deccan, said Friday it has raised 4.5 billion rupees (100 million dollars) from two foreign banks to tide it over a financial crisis. G.R. Gopinath, Managing Director of Air Deccan, said the deal with British-based Banks Investec Bank and Germany’s Billon and HSH Nord Bank AG will be spread over 15 months and in four tranches. ‘‘This deal would go a long way in ensuring Air Deccan’s financial stability and insulating us from the turbulence in the domestic aviation industry even as we aggressively pursue our growth and expansion plans,’’ Gopinath said. The airline reported a 74-million-dollar loss for the 15-month period ended in June and said it was hit by costs of new routes and cut-throat competition from a raft of new entrants into the market. Air Deccan, launched in August 2003, blamed the lion’s share of its loss on efforts to build market share through launching 56 new routes that it said would bring in profits by 2008-09. ‘‘Air Deccan is well on its way to significantly improving its profitability levels,’’ Gopinath said. He said the first of its 60 Airbus A320s, being acquired at a cost of two billion dollars, was slated to be delivered this month with the final deliveries being completed by 2013. India’s passenger market is forecast to grow by 30 to 35 percent this year after expanding by 25 percent last year. Some 25 million people flew last year, 15 million for the first time, experts say, and the number is tipped to grow to about 50 million to 60 million by 2010 as salaries increase. But the balance sheets of many airlines are covered in red ink as stiff competition has forced down fares in many cases to the price of train travel and sometimes even lower.
Protesting the "abnormal delay" in an Air Deccan flight's departure from Chennai, over 40 passengers today refused to alight at the airport here and resorted to a dharna.
According to the passengers, the flight, scheduled to take off from Chennai at 6.10 a.m, took off after a delay of three hours and landed here around 10.30 a.m ,instead of the usual time of 7.10 a.m.
Blaming the management for the "delay and poor service," the agitated passengers resorted to a sit-in and refused to alight, police said. Many passengers sat cross legged and were shouting slogans.
After airport officials and Air Deccan management pleaded with them, the passengers got down. To compensate the delay, all the passengers were given a complementary flight ticket, management sources said. (Agencies)
My brother flew Air Deccan flight DN-714 from BOM-MAA yesterday i.e. Oct 25th. His flight was originally scheduled to depart at 2055 but was rescheduled to 2030 a few days ago. However, yesterday, it got rescheduled twice! first to 2320 and then finally to 2355 hrs!! I think this was because of the incident mentioned below...
Overall, it seems that Air Deccan is still struggling with these delays even in relatively trouble-free weather. I shudder to think of the delays in winter!
I think their priority should be to first minimize these delays and improve punctuality rather than aiming for the number one slot. Quality is always better than quantity.
Capt. Gopinath, are you listening??
karatecatman wrote:
Protesting the "abnormal delay" in an Air Deccan flight's departure from Chennai, over 40 passengers today refused to alight at the airport here and resorted to a dharna.
According to the passengers, the flight, scheduled to take off from Chennai at 6.10 a.m, took off after a delay of three hours and landed here around 10.30 a.m ,instead of the usual time of 7.10 a.m.
I don't know about Number 1 or Number 10, but if they deliver what they promise, then that's fine.
On another topic, DN has started some sort of "web check in" but without pre-assigned seat numbers. Shall let you know how it works, because the check-in at the airport used to be amongst the worst of experiences a human being customer could have with a service providor.
AND the haze as well as fume clouds in Delhi are getting thicker as well as lower every evening. THAT will be the real test.
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Starboard Side emergency reclining window please, thank you, and the lounge card, if you don't mind?
The Air-Deccan's website states that they follow a policy of free seating, children and people who are physically challenged are not permitted to sit on the emergency rows. Most of the trip reports on DN state that people rush like mad to occupy the seats of their choice once boarding is announced and the cabin crew rightly do not stay in the cabin during boarding.
Based on the readings, it occured to me that maybe DN compromises this safety regulation. Came across a trip report on Anet with a picture of the emergency row (window) being occupied by a passenger who looks like a kid. I'm not sure of it cuz I cant make out the age of a person by looking at him/her. Just thought should share and generate another opinion.
Photo Courtesy: Anet member Abrelosojos
IMO, with the kind of passenger profile DN carries (mostly first time fliers) it makes it much more difficult and frustrating for crew to make them understand about the complexities of safety onboard. Not to mention their indecorous attitude towards the crew members.
Imagine this:
Crew: Excuse me sir :) , since this is an emergency exit row and according to safety regulations, children and physically challenged people are not permitted to sit here and .........
Pax: Arre bhaiya !! hum to yahin baithenge, hamaare baccho ko tum peechay bithaaoge? humne bhi paise diye hai....blah blah
Deccan IMO has been blindly trying to ape western LCC's without understanding the specific complexities of operating in India. Another problem with them is that Gopinath is in a tearing hurry: he should be consolidating first and growing slowly. The ATR ops are the only ones that are somewhat profitable: but the ATR's are not even being maintained properly. Their A320 ops are a COMPLETE disaster.
Free seating actually increases the complexities and contributes significantly to degrading the what i call the "customer experience index". If they dont want to assign specific seats thats fine: atelast have organised boarding. Divide pax into lots based on check-in sequence. first lot should be Unaccompanied minors and disabled pax, followed by 2/3 lots of passengers in order of check-in.
But can we really expect this kind of logic from an airline run by mallus?
Deccan IMO has been blindly trying to ape western LCC's without understanding the specific complexities of operating in India. Another problem with them is that Gopinath is in a tearing hurry: he should be consolidating first and growing slowly. The ATR ops are the only ones that are somewhat profitable: but the ATR's are not even being maintained properly. Their A320 ops are a COMPLETE disaster.
Free seating actually increases the complexities and contributes significantly to degrading the what i call the "customer experience index". If they dont want to assign specific seats thats fine: atelast have organised boarding. Divide pax into lots based on check-in sequence. first lot should be Unaccompanied minors and disabled pax, followed by 2/3 lots of passengers in order of check-in.
But can we really expect this kind of logic from an airline run by mallus?
2006-10-30 19:11 Source : Moneycontrol.com Deccan Aviation has announced its first quarter results. The company reported net loss of Rs 42.94 crore in the first quarter. Its turnover was up at Rs 536 crore from Rs 187.8 crore.
Chief Financial Officer of Deccan Aviation, Mohan Kumar discusses the company's numbers, along with plans and targets for the future, which include increasing the number of seats per day to 29,000 by December.
Excerpts from CNBC – TV18’s exclusive interview with Mohan Kumar:
Q: Give us a breakdown of the results. What did you see in load factors, yields and operational losses?
A: We have reported a topline of about Rs 536 crore, but the bottomline saw a loss of Rs 42.94 crore. During the period, our load factor was averaging around 72%.
It is lean season during the months of July and August and again the load factor picked up in the month of September. We have flown 1.28 million passengers in this quarter.
Q: You have recently tied up with Lufthansa for component and MRO that is Rs 460 crore. How much does it cut into your cost structure?
A: This should reduce my cost by at least USD 4-5 million per annum over a period of next six-eight years.
Q: What about the ATF price cut that has come? Why no fuels surcharge cut there?
A: Though ATF price has come down in the month of October by 8%, we are waiting for the ATF prices for the month of November. The crude has almost stayed at the same level in the month of October, so we do not know whether the ATF price is going to move downwards.
Regarding the second part of the question, the increase or surcharge imposition changes in the surcharge cannot be done very frequently and it needs some software changes, etc.
Q: Three flights delivery in October took costs shooting up. Taking all those factors into consideration, give us a Q3 outlook?
A: In the third quarter, our inventory per day has gone up by 5000 fleets. Actually from tomorrow onwards, from the existing level of 20400 seats, we are moving to 25600 seats per day.
And November- December being a good month, along with October, which was also good as far as the load factor and yield was concerned, we should hope for a good performance in this quarter.
Q: What is the current load factor in the peak season and how is the seat factor capacity increasing? Has the industry seat factor shot up by about 40-50% in the last four months?
A: That is only for a few days, I can't say it is average 40-50% throughout the season, but on some of the days like two days before Diwali or one day after Diwali, the load factor will shoot up and the demand for airline seats will be very high.
But the average seat load factor is very important. The average demand is most important for us. You cannot make your business plans on temporary fluctuations and gains.
Q: Speaking about fluctuations, four more airlines may start in the next 12 months. Do you see more pressure on yields then?
A: That obviously depends on how the demand curve is moving against the capacity coming up. It is all about the market finally, how it is developing for airline seats. Only that can decide whether it can take three more airlines or not.
Q: Could you give us some figure on whether new aircrafts would be added load factor, seat capacity taking all those factors into consideration?
A: In October, we received three A320 deliveries and one ATR delivery and in the next two months, we have four more ATR due for delivery. Right from the month of November, it is all going on schedule. Our seats per day by end of December should be around 29000 on both ATR and Airbus sectors.
MUMBAI (Reuters) - Deccan Aviation Ltd. plans to launch air cargo services through a new subsidiary and a top official said on Monday it would sell a 1.96 percent stake for up to 295 million rupees to Investec Bank (UK) Ltd.
Investec, which had funded Deccan Aviation's aircraft, was offering to buy 1.96 million shares at 150 rupees each, Managing Director G.R. Gopinath told Reuters.
Shares of Deccan Aviation, which runs budget airline Air Deccan, fell 5.6 percent to 101 rupees in the Mumbai market.
"We have a long association with Investec and they wanted a stake," Gopinath said. "The funds will be used for expansion."
He also said the company's cargo operations should start operations in six to nine months. "There is tremendous synergy given our huge network and operating bases."
The cargo subsidiary would have its own fleet but subcontract engineering and maintenance to Air Deccan, he added.
Air Deccan has 40 planes flying to 60 centres. It has 8 operating bases spread across the country, Gopinath said.
The company reported a loss of 429.4 million rupees on revenue of 5.36 billion rupees in the quarter to September 2006.