, will be the vice-chairman of Kingfisher Airlines, the new airline entity to be created by the merger of Kingfisher with Deccan Aviation in the new financial year. Gopinath spoke to Surajeet Das Gupta about the deal and what the future holds for what will become the country's biggest private carrier.
With the merger, you will become the largest airline company in the country. What are the kinds of targets you are looking at?
In the next five to seven years, we will have a combined fleet of over 158 aircraft, virtually doubling our current size. We are looking at gaining 0.5 per cent market share from our competitors every month, which will give us an extra 6 per cent annually.
Of course, these numbers could change depending on the growth patterns of competing carriers.
Also, with the merger, our network is virtually double that of Jet Airways', which flies to 44 cities, and Air-India's domestic operations. Between the two of us, we are present in 78-79 cities.
What kind of savings does the merger bring to the table?
Savings is just one aspect of the merger and we could save $100 million. The details are being worked out.
However, the more important thing is that it gives us size, network, consumer leverage, ensures seamless travel for passengers and also leverages in getting in more capital as well as better market capitalisation.
Together we already have over $1.5 billion in revenues. Air Deccan has reached a market cap of $1 billion.
Will you also have huge losses on your balance sheet?
With fares going up, we expect that in six months we should turn the corner.
How would your international operations pan out once you get permission to fly abroad from August 2008?
The low-cost carrier will fly short-haul flights to West Asia, Saarc and South-East Asian markets such as Singapore and Malaysia. Kingfisher will fly the long-haul routes to the US with wide-bodied aircraft.
You seem to have taken the decision of a merger very quickly without many deliberations on the Accenture report. Was it meant to be like this?
We decided that a decision should be taken fast whether we want to go ahead or not, so that there is a clear sense of what direction we are taking, rather than let the stock market, employees and consumers keep guessing about the future.
Will the merger mean that your low-cost carrier will not operate on metro routes and concentrate on the smaller cities?
The category of passengers who travel with the low-cost carrier is different from Kingfisher's, so those will continue. We might not have as many flights on the metro routes.
What is the kind of cash you will require to finance your growth?
We are looking at various options and will have to sit down and look at the numbers on investment infusion that will be required.
