Fare war is going to be less: Mallya

Mumbai, June 1 (UNI) With Kingfisher airlines acquiring 26 per cent stake in Air Deccan, Kingfisher airlines chairman and Air Deccan Vice chairman Vijay Mallya today said the unprecendented fare war, which has raged in the low-cost carriers, will be less observed in the two airlines.

''Both the airline companies will compliment each other's synergy for the development of both the companies and both the companies will be able to compliment each other,'' said Mr Mallya and Air Deccan executive chairman G R Gopinath while talking to reporters here today.

Yesterday, Kingfisher acquired 26 per cent stake in Air Deccan, the low-cost airline.

In the first year of operations, the two companies will make a profit of Rs 300 crore, Dr Mallya said.

Air Deccan is known for being a low-cost carrier offering the luxury of air travel to the all-powerful middle-class of India, while Kingfisher is known to give a hi-fi service to their customers. With coming together of these two companies, according to market sources, the low-cost status of Air Deccan is unlikely to continue and Mr Mallya gave the same hint, saying that the prices would not decrease even as the company suffers losses.

There will be a board of directors of 12 persons in Air Deccan, he said.

The UB Group has the option of taking 20 per cent preferential stakes in the Air Deccan as per the SEBI guidelines, he added.

The combine of two airlines will have 579 flights in a day connecting 69 cities and putting it ahead in the India skies.

Replying to a query whether both the airlines will maintain their own status of Air Deccan being recognised as the low-cost carrier and Kingfisher as the high profile, Mr Mallya said ''consumers will continue to get a good deal but not at the loss to the service provider''.

''We can reduce cost of both significantly,'' he added.

''Kingfisher is not in a hurry for IPO,'' he said while replying to a query on when they will come out with IPO.

Mr Mallya said the two companies started negotiations six months ago and Capt Gopinath felt that Kingfisher wanted to purchase Air Deccan but in the last three days, a new clear cut offer was made and finally the deal was worked out.

Air Deccan is known for being a low-cost carrier offering the luxury of air travel to the all-powerful middle-class of India, while Kingfisher is known to give a hi-fi service to their customers. With coming together of these two companies, according to market sources, the low-cost status of Air Deccan is unlikely to continue and Mr Mallya gave the same hint, saying that the prices would not decrease even as the company suffers losses.

Defending the different status of the two airline companies, the two said Toyota sells the costeliest as well as a cheaper model of the car, similarly the two airline comoanies will work.

UNI