Photo: G. R. N. Somashekar

BUILDING ON STRENGTH: Capt Gopinath (right), Chairman and Managing Director, Air Deccan, and Mohan Kumar, Director (Finance), at a press conference in Bangalore on Friday.

BANGALORE: Air Deccan has posted revenues of Rs. 1,352 crore and a net loss of Rs. 340 crore for the 15 months ended June 30, 2006, and the low cost airline has signed a term sheet to raise $100 million to take care of its contingencies.

Giving details of the revenues, the Air Deccan Director (Finance), Mohan Kumar, said the term sheet had been signed with a consortium of bankers in Europe for funds and this should be available in a month or so.

The revenues were impacted by increase in fuel and other input costs and introduction of 20 new aircraft, he said, adding that aircraft fuel expenses for the 15-month period was Rs. 625 crore and other operating expenses (including aircraft lease rentals) were Rs. 719 crore. He was hopeful that the aircraft fuel expenses would come down since the price of ATF had come down to $64 from $73 last month.

Agreeing that the fuel cost and leasing rentals were slightly high, he said the ideal mix would be 36 per cent and 12 per cent, respectively, in expenditure.

Mr. Mohan Kumar said the airline had a robust growth in seat factor, averaging 85 per cent in the peak seasons.

"However, the benefit of higher yields on the new routes, which account for over 58 per cent of all routes as of now, will flow in the next few quarters.'' New routes took a year to mature and started giving optimum yields. Of the total 96 routes operated as of June this year, 56 were new routes.

Air Deccan Managing Director G. R. Gopinath said, "The strong market share (21.2 per cent) is of strategic advantage, as it will be the springboard for our future expansion, growth and profitability, besides insulating us from the turbulence in the domestic aviation industry.''

Capt. Gopinath said the airline was working on improving the load factor, which, as of today, is 80 per cent, and getting better yields on the seats, besides cutting down on costs.

A senior team from Aer Lingus has come on board and revenue management software is being implemented to become operational by December this year.

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