Air Deccan posts Rs 340cr loss

Deccan Aviation, the operator of low cost carrier Air Deccan, today reported a net loss of Rs 340.55 crore for the 15-month period ended June 2006. The company's revenue for the period stood at Rs 1,236.39 crore while other income was Rs 115.41 crore.

The company's board has approved a proposal to raise $100 million to meet working capital requirement and aircraft acqusition. The company has signed a term-sheet to raise funds from a consortium of European banks.

Capt G R Gopinath, managing director of Deccan Aviation, said the overall performance for the 15-month period was impacted by various factors including the steep increase in aviation fuel price, introduction of 20 new aircraft and addition of 56 new routes besides rising personnel cost.

"The company is burning cash on all new routes launched early this year. Of the total 96 routes operated as of June 2006, 56 were new routes which will take anywhere between 10-12 months to mature and yield the desired results," he added.

"We are working on innovative financial structures,  which will strengthen finances and support our growth stratergy, especially over the next 8-12 months," he added.

With a fleet of 34 aircraft and 55 destinations as of June 30, 2006, the airline carried over 4.4 million passengers over the 15-month period, and has emerged as the second largest airline with a market share of 21.2% in June 2006, Gopinath added.

Mohan Kumar, director (finance) of Deccan Aviation, said: "We had a robust growth in our seat factor averaging 85% in the peak season. The benefits of higher yields on new routes, which account for over 58% of all routes as of now, would flow in the next few quarters."