Deccan likely to scale down metro operations

Low-cost carrier Air Deccan is likely to scale down its metro operations, according to reports. The route rationalisation exercise will be finalised after the merger of the airline with the UB Group-owned Kingfisher Airlines becomes effective from August 1.

The first signs of the move will be evident when both the airlines announce their summer schedules in March after receiving the approval of the Directorate General of Civil Aviation. Deccan is likely to bring down and withdraw frequencies between Mumbai-Delhi in the schedule.

But Deccan's executive director Captain G R Gopinath denied any such move. "There will be route rationalisation and that exercise is on. But it is a complex exercise as both the airlines together connect 69 destinations, operating 570 flights daily. There is need for both the airlines to ply on metro routes. Deccan will pull out from the sector where it is losing money and Kingfisher will do the same. The only question is that of profitability of the routes."

The route rationalisation exercise is an inevitable part of the merger of the low-cost carrier with the full service airline.

But Deccan, of late, had followed the model of connecting Tier II and III cities to metros and reaped huge benefits from the move. It has recently announced another flight from Mumbai to Indore, starting March 30.

According to an official in the airline, who didn't want to be named, the flights to metros are not likely to be scaled up in the future and there is a possibility that both the airlines may decide to have only one airline on a route where they are currently operating separately, depending on the market.

However, what is not clear is if Deccan will continue with its pricing policy as it has done in the past to increase its market base or not.

Currently, the airline flies at least 25 per cent of its 325 daily flights on metro routes. But, according to analysts, if Deccan pulls out of metro routes or even brings down the frequency, it will lower competition in this segment and affect choice and pricing.