Air Deccan plans $5mn hangar at Chennai airport

Air Deccan is set to build a hangar at Chennai airport at a cost of $5 million (about Rs 22 crore). The hangar is expected to give the low-fare airline control over the speed of its regular maintenance work, and improve the efficiency of operations.

Air Deccan received permission from the Airports Authority of India (AAI) last week to start a hangar in Chennai. The company has been allocated 60,000 square feet of land for the hangar, said G R Gopinath, managing director of Air Deccan. Work on the hangar is expected to start in two months.

All day-to-day inspections, line maintenance and ancillary work will be done at the engineering and manufacturing facility in Chennai. The airline company's current engineering base is in Bangalore.

Air Deccan is at present relying on Indian Airlines for maintenance work. The system has two drawbacks -- Air Deccan's problems are not Indian Airlines' priorities and the company has to pay in advance. The consequence of the system is that inefficiencies get built in to Air Deccan's operations because of delays during maintenance.

Gopinath said that the biggest advantage of the hangar is that the company would have better control over its operations. The approval for the hangar comes at a time when Air Deccan has begun to add more planes to its fleet of 17.

Air Deccan is planning to add 30 ATRs and 32 Airbus planes to its fleet over a five-year period. The investment in new planes would be about $1.4 billion, Gopinath said.

Air Deccan, which expects to log a turnover of Rs 1,000 crore this fiscal, plans to raise funds for the expansion through a combination of private equity placements, a public offer of shares and debt.

The company has already raised $50 million through equity placements to ICICI Ventures and Capital International. Gopinath said the timing of the public issue would be decided soon.