Deccan Aviation posts Rs 42.94cr Q1 loss

Bangalore-based Deccan Aviation, operator of low cost carrier - Air Deccan, has posted a loss of Rs 42.94 crore for the first quarter(Q1) of financial year 2006-07 (the company's FY is July to June). Net income from operations for Q1 stood at Rs 358.70 crore.

The company's profits was mainly hit by huge aircraft fuel expences to the tune of Rs 240.11 crore and other direct operating expences like aircraft lease rentals at Rs 229.33 crore.

Deccan Aviation's board of directors at their meeting approved in-principle, a foray into the air cargo business through a wholly owned subsidiary and formation of a company for the same. The board also approved the issue of 19.63 lakh equity shares of Rs 10 each which shall be 1.96% of post issue capital to Investec Bank (UK) on preferential basis, subject to approval of shareholders.

Commenting on the company's performances, Capt G R Gopinath, MD of Deccan Aviation, said: "With our strong market share, we are confident to cut down our losses going forward. Our fleet expansion plans and new route openings will be the force propeller for our future growth and profitability, besides insulating us from the turbulence in the domestic aviation."

"We have had a robust growth in our passenger load factor averaging 73% in the peak seasons. We are expecting higher yields on the newer routes which account for over 58% of all routes as of now but these would flow in the next few quarters, typically new routes take a year to mature and start giving optimum yields," Mohan Kumar, director finance at Deccan Aviation, said.

"The company is operating on a low debt level compared to the volume of business. The total debt as on September 30, 2006 is Rs 542.96 crore of which Rs 233 crore is the aircraft hire purchase capitalised debt; Rs 251 crore is towards pre-delivery financing for the aircraft, Rs 16.37 crore is term loan for charter division and balance of Rs 42.59 crore is for airline operation division," he added.