Kingfisher Airlines and Deccan Aviation will save Rs 300 crore in the first full year of operation by working together, Vijay Mallya chairman of the UB Group, said at a press conference here today.
The savings would come from a common sharing of engineering services, spares, employees, pilots, other crew, and ground-handling facilities.
The combined revenue of Kingfisher and Air Deccan airlines in FY07-08 is estimated at Rs 6,000 crore. Mallya said, “We will soon see a net profit in Deccan Aviation. Together, the two airlines account for 50 % of the deployed capacity of south India. Mallya said Kingfisher was expected to make an operational profit in FY08 and net profit in FY09.
For the time being, the two airlines will continue to be run independently, but would work out an optimal route strategy, wherever possible.
Deccan Aviation will continue to be run as a low-cost carrier. Mallya, however, said there was no immediate plans to raise fares though he added that consumers could not hope to get fares at levels where the airlines were making a loss. However, the combined entity can offer competitive air fares owing to cost savings of Rs 300 crore.
Read more in The Business standard article.
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