The Hindu Business Line : Deccan Aviation Q1 net loss at Rs 42 cr

It recorded a 183 per cent rise in turnover for the same quarter to Rs 536 crore. The net loss was largely because of high aircraft fuel expense, which was around Rs 240 crore and direct operating expenses such as aircraft lease rentals worth Rs 229 crore.

The airline did not give details of the corresponding previous quarter's profit/loss figures as the company became a listed entity only this year.

On a sequential basis, there was a 61 per cent reduction in net loss while turnover grew 24 per cent. For the 15-month period (April 2005 - June 2006), Deccan Aviation incurred a loss of Rs 341 crore on a turnover of Rs 1,352 crore.

The company, which entered into an agreement with two European banks to raise $100 million for the next 15 months, has also decided to allot 1.96 per cent stake to Investec Bank of the UK as part the deal. The company has already received the first tranche consisting of $30 million.

Air cargo service

The statement said the company has also decided to launch an air cargo service through a wholly owned subsidiary. The company's Director, Finance, Mr Mohan Kumar, said the decision to launch an air cargo service was based on the boom being experienced by all the sectors. He said the air cargo service will have a separate team headed by a chief operating officer. The company will apply for a licence to operate the service shortly and the operations are expected to commence sometime early next year.

Mr Mohan Kumar said, currently the total debt of the company was around Rs 543 crore. It consisted of Rs 233 crore of aircraft hire purchase capitalised debt, Rs 251 crore towards pre-delivery financing for the aircraft, Rs 16.37 crore towards term loan for charter division and Rs 42.59 crore for the airline operation division. Around Rs 40 crore has already been paid off recently to the banks, he said.

"We have had a robust growth in our passenger load factor averaging 73 per cent in the peak seasons. We are expecting higher yields on the newer routes which account for over 58 per cent of all routes as of now but these would flow in the next few quarters, typically new routes take a year to mature and start giving optimum yields," Mr Mohan Kumar said.

The statement said Air Deccan would continue to lower unit cost to improve profitability while developing and monitoring virgin routes.

More Stories on : Financial Performance | Airlines | Air Cargo

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