Deccan Aviation is not out of the woods yet contrary to the optimism shown by the management in the past about an ongoing turn-around. The private equity-backed low cost airline company has posted a loss of Rs 213 crore ($50.7 million) in the quarter ended March 31, 2007. (See BSE filing.)

The company attributes this to high operational costs and a weak domestic yield. Apparently, February and March are inherently weak months for the travel industry. The airline had last quarter (ended December 31, 2006) posted a profit of Rs 9.64 crore.

In Q3 (Deccan’s financial year is from June-June) ended March 31, 2006-07, Deccan Aviation registered revenues of 457.45 crore, 66.34 per cent higher than the same quarter last year. The operating losses were Rs 183.78 crore. The net loss was Rs 213 crore. For the first nine-month period ended March 31 the net losses were Rs 244 crore. The airline has improved its load factor to 83 per cent from 71.75 per cent. It also carried 1.7 million passengers compared to 1.07 million and operated 350 flights per day as against 230 flights in the same period last year.

Capt G R Gopinath, managing director, Deccan Aviation, has attributed the losses to high fuel prices (which are above $65 a barrel), and a lean season and other one-off expenditures.

ICICI Venture Funds Management and Capital International have invested in Deccan Aviation. The company is in the markets again to raise about $100 million, and is in talks with firms like Reliance Capital and TPG Partners.

Posted on 04/27/07, 11:33 AM
in: Main Page
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