Air Deccan lines up $25m for 2 simulators

Air Deccan, the country's first budget airlines, has charted out a mega expansion plan. On the cards are immediate plans to set up two new simulators at a total investment of around $ 25 million for its Airbus and ATR fleet.

The airline, which has placed orders for 30 Airbus planes and 30 ATRs to be delivered over five years, plans to launch over 100 flights every year.

It not only plans to have additional frequencies on trunk routes, for instance connections between the metro cities, but also connect smaller towns across the country where no other airline operates.

Deccan Aviation, the holding company of Air Deccan, is planning to go for an initial public offer in the next twelve to eighteen months to fund its expansion.

The company has in the recent past raised closed to $40 million by diluting close to 25 per cent equity in favour of ICICI Ventures and Capital International.

G R Gopinath, managing director said, "We expect our total turnover to exceed Rs 1000 crore by next year from Rs 450 crore at present. We have already broken even. Simple logic will enable us easily estimate the potential of this business. In a country with a population of 1 billion, we have merely 600 flights per day compared with the US which has 160,000 flights per day and Europe having 40,000 flights."

The idea is to reach air travel to the masses, he added. The airline today inaugurated its Mumbai-Nashik flight at a fare of Rs 999. According to Gopinath, while it was appropriate to go for private equity investment in the first phase of airline's fund raising programme, a public offer in the second phase would be the right option.