Kingfisher Airlines and Simplify Deccan to Merge

Kingfisher Airlines and Deccan Aviation will merge in 2008. Both these brands will be retained by single entity called as Kingfisher Airlines, which is majority owned by UB group. The new entity will become operational from April 2008 and Mr. Vijay Mallya will be the chairman of the airlines; while Capt. Gopinath will be the vice chairman.

The challenge for the new single entity will be firstly to ensure a cost focus at both carriers. Kingfisher has generated accumulated losses of USD300 million in just two and a half years, while Deccan has accumulated losses of USD200 million since starting up in 2003.

The move will create an airline with around 80 aircraft, challenging Air India and Jet Airways for dominance of the high-potential Indian aviation market. It also takes advantage of Deccan’s right to fly international routes from Aug-08, with the budget unit set to launch services to the Middle East with A320 equipment and Kingfisher utilizing wide body aircraft to launch long-haul services, initially to the US.

There are several areas where the two airlines can reduce cost and build-down manpower through synergies.

Way to go…