Brand Deccan fades out as Kingfisher zooms in

Kingfisher AirlinesNew Delhi: The brand that pioneered low-cost aviation in the Indian skies is all set for its flight into sunset.

After finalising his takeover of Deccan Aviation last year, Kingfisher Airlines chairman Vijay Mallya had replaced the low cost carrier's logo with that of his own airline, and had all Deccan planes repainted to reflect the Kingfisher branding. Now, he has finally announced his intention to shut down the brand, saying "Deccan will cease to exist because after the merger there will be only one company and that will be Kingfisher Airlines."

What is significant, is that according to the rules of the Directorate General of Civil Aviation (DGCA), Air Deccan, which commenced operations before Kingfisher did, will become eligible to commence international operations on 26 August. If this rebranding occurs, then of course, Kingfisher stands to gain, as it would then be able to use Deccan's licence to fly abroad.

The UB Group had originally acquired a 26-per cent stake in Deccan Aviation in May 2007(See: UB Group picks up 26 per cent in Air Deccan), and subsequently increased its stake to 46 per cent after the mandatory open offer to acquire another 20 per cent.

Deccan Aviation founder and chairman, Captain Gopinath has maintained that the two brands would co-fly and complement each other, one as a full service airline, and the other as a low-cost operation. Once the stock ratio is finalised, UB Holdings is expected to own a little over 51 per cent of the combined entity.

Capt Gopinath is said to have been in the dark about Mallya's announcement, and was reported to have said that any rebranding would require the board's approval, and that there was no such proposal before the board.

According to reports, at a meeting at the ministry of civil aviation on 17 March, it was clarified that once Deccan became eligible to fly abroad and if Kingfisher were to merge with Deccan, then it too could fly abroad as it would have been deemed to have fulfilled the legal formalities. Media reports quoted a spokesperson for Vijay Mallya as saying that, ''If the DGCA letter was addressed to Deccan, and if Deccan changes its name to Kingfisher, understandably the clearance applies to Kingfisher."

Industry sources indicate that subsequent to the merger and the rebranding, Mallya would most probably differentiate the two services by initiating full service flights to the US and Europe, and low-cost ones to the Gulf and South East Asian destinations, with Kingfisher retaining its slot as the premium brand.