Air Deccan stake sale soon

Hyderabad: Air Deccan will launch its first phase of equity divestment within the next week to 10 days, according to the company's managing director, Captain GR Gopinath. He said the airline would be divesting 26 per cent of its equity and hopes to raise $40 to $60 million through the sale that would be used for adding more aircraft to the company's fleet, through outright purchase or lease.

Air Deccan is buying two new Airbus planes in February 2005. It took delivery of two ATRs recently, while three more are being added this month. Once these ATRs are put in operation, Delhi would be connected to cities like Amritsar, Dehradun, Agra, Kanpur and Jalandhar, while Kolkata would be connected to Bhubaneswar, Coochbehar, Jamshedpur and Bagdogra. Gopinath said, "At present the airline is doing about 75 flights a day. It intends to add 100 flights a day each year." Air Deccan is expecting revenues of $90 million in 2004-05 and is hoping to report a profit.

Gopinath revealed that Air Deccan had received seven bids for its equity divestment offer, six international and one domestic. He said the airline had discontinued talks with Richard Branson of Virgin Atlantic, as the government had not spelt out its stand clearly on FDI in airlines. Virgin Atlantic was said to be keen on picking up a 49 per cent stake in the company. Gopinath said Air Deccan would come out with an IPO within five years of the stake sale, and private equity partners would get an exit option.