Mergers are called amalgamations, while Takeovers are acquisition of a part of equity capital of a company that enables the acquirer to exercise control over the affairs of the company. Aviation consolidation looming in India : Outlook , Report released, March 7, , accessed on January 10, www. Media center, 23 February, accessed on January 5, www. User Username. Remember me.
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This is despite the fact that on the face of it, both the airlines, leave alone the personalities of their promoters, differ as chalk as cheese! If Air Deccan was positioned for the masses, Kingfisher Airlines is unabashedly for the classes. Both cater to different segments of the society and have different models. And hence their marriage appeared to be a recipe for disaster.
But hard business sense points out that it is not the case. And both have plans to acquire more Airbus aircraft. Scarce manpower can be optimally utilised, insurance premium and lease rentals can be re-negotiated, infrastructure like engineering, ground handling, training can be combined. With commonality of fleet Airbus we intend sharing of resources, aircraft spares, airport infrastructure such as X-ray machines, conveyer belts, step ladders.
Mallya has said the merged entity can look forward to slash up to Rs crore in costs in the first full year itself. Hence the combined entity can slash cost by up to Rs 50 crore on engineering alone. Kingfisher Airlines and Air Deccan can access ground infrastructure at 65 airports, of which 28 are common. The international operations, as and when both the airlines are allowed to kick-start, would bring in additional synergies.
So once both begin international operations, Kingfisher would fly long haul destinations like the US, while Deccan could look at areas like the neighboring countries, South East Asia, and the Middle East. Air Deccan would be eligible to fly abroad from But although managements of both the airlines have said both the entities would be run independently, insiders say some changes already have begun to surface with a brand name change for Deccan being toyed by Kingfisher.
Home Business. Both cater to different segments of the society. Written By Rabin Ghosh.
Kingfisher buys large Air Deccan stake
Simplifly Deccan formerly known as Air Deccan , was the first Indian low-cost carrier. The airline appealed to middle class travellers with low fares and a large route network. It also employed several innovative methods to ensure the profitability of its business model. Nevertheless, Simplifly Deccan suffered high losses and merged with Kingfisher Airlines in April Kingfisher replaced the Deccan brand with Kingfisher Red in August
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, The new firm will operate two separate brands — Deccan and Kingfisher — and will retain their identities of being a low-cost carrier and a full-service airline, respectively.