The Hindu Business Line : Air Deccan may raise $50 m in second tranche

Capt. G.R. Gopinath, Managing Director, Air Deccan, and Mr Filippo Bagnato, CEO, ATR, at a press conference in Bangalore on Thursday. — G.R.N. Somashekar

Bangalore , Jan. 6

LOW-cost carrier Air Deccan may go in for a second round of funding worth $50 million before floating an IPO.

The Air Deccan Managing Director, Capt. G.R. Gopinath, told Business Line that additional funds could be necessary because of the size of the its expansion plan. Capt. Gopinath said it would take another three years for floating an IPO. The no-frills airline is buying 30 Airbus A-320s and 30 ATRs over a period of 5-6 years. Last month, the airline said it was selling 13 per cent equity each to ICICI VF and Capital International for a consideration of $40 million.

Once these two investors come on board, Capt Gopinath and Mr Samuel, the other co-founder of the airline, will hold around 34 per cent stake, the Ladhanis will hold around 17 per cent stake, Golden Ventures will hold 15 per cent while the rest will be with a clutch of small investors.

The airline has also signed an agreement with ATR for buying the 70-seater 15 ATR72-500s and an equal number of these on lease. ATR will also give a simulator along with the aircraft. The sticker price for each of these aircraft is around $18 million. The airline is expected to approach COFAS and SACE for getting guarantees for acquiring the aircraft. The airline recently signed another agreement with Airbus for buying 30 Airbus A-320s worth $1.8 billion. These aircraft will be delivered over a period of five years.

Before buying these ATRs, Air Deccan will take deliveries of three used ATR42-500s and an equal number of ATR72-500s. Once the new ATRs are bought, these old aircraft will be phased out.

Air Deccan is also planning to hire around 250 pilots in another two years with the aircraft fleet expected to go up to over 25 during the period. With the addition of these pilots, the total strength is expected to increase to 400 pilots all together. Currently, Air Deccan has a fleet strength of 12 ATRs and three Airbus A 320s.

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