Deccan will remain a separate entity even after merger: Gopinath

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New Delhi, Dec 5 (UNI) Country's leading budget carrier Air Deccan today categorically said the airline, even after the merger with UB Group Chairman Vijay Mallya-promoted Kingfisher airline, will remain a separate entity.

''Even after the merger, Deccan airline will remain a separate entity and will not become a full service airline,'' Air Deccan Chairman G R Gopinath told reporters here.

He added that the merger is expected in the next two to three months, he added.

Capt Gopinath said the airline will decide future course of actions after the Accenture report on the Kingfisher-Deccan combine is released on December 19.

Recently, Kingfisher appointed consultancy firm Accenture to study the entire structure of the Kingfisher-Deccan combine. The report will look into whether Deccan can become a complete arm of Kingfisher.

''The report will be studied by Dr Mallya and myself and then by the board of directors. Only then will a decision be taken on the issue,'' Capt Gopinath said.

When asked if Deccan would consider the option of a merger or a reverse merger with Kingfisher Airlines, he said, ''We will continue to be different brands, entities and products. Kingfisher will continue to be a full-service carrier while Deccan will be on the other side of the spectrum. Otherwise, such a large amount of money would not be spent on the rebranding exercise.'' Dr Mallya's United Breweries Holdings had acquired 26 per cent stake in Deccan for Rs 550 crore on May 31 and then bought an additional 20 per cent as per the norms of the Securities Exchange Board of India (SEBI).

Capt Gopinath said both the airlines are working together towards bringing the fares down.

At present, only two per cent of country's population are travelling by air, he said adding that there is a huge potential in this sector.

''To tap 98 per cent of our population who are not travelling by air, prices will remain a factor,'' Mr Gopinath said.

On the spiralling prices of aviation turbine fuel (ATF), he said average realisation, say for example Delhi-Bangalore, might go up by Rs 500-1,000.

Deccan will complete five years of domestic operations in March next year and will become eligible for international operations.

Dr Mallya, who has applied for several international destinations, including the United States and the United Kingdom apart from Southeast Asia and the Gulf, had said will use Air Deccan's licence to fly international destinations.

Capt Gopinath also said that Deccan, in association with Mumbai Airport International, IDFC and the Rahejas, has expressed interest in low-cost airports put up for development by the Karnataka government recently.

The government had invited bids for the development of airports at Gulbarga, Bijapur and Shimoga. Apart from the Deccan consortium, the Tata-Changi consortium is among the prominent bidders for the projects.

UNI

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