Air travel was a daydream for the common man until about four years back. A former army soldier decided to take a plunge in the air. An air trip in a helicopter, en route to Goa from Bangalore in 2000, sparked a passion in him that saw him create India's very first low-cost airline to cater to the aam aadmi (common man). He is Captain G R Gopinath and his dream machine is Air Deccan, which he established in August 2003. The man who pioneered the concept of low-cost airline in India is now shaking hands with his rival Vijay Mallya, the promoter of Kingfisher, a luxury, full-service airline, who never made secret of his ambition to buy Air Deccan.
But it is not an outright sale of India's largest Low Cost Carrier (LCC) or as Capt. Gopinath would like us to believe. He assures in an interview, "UB picking up 26% stake has nothing do with losing control as I have always played the role of an entrepreneur and let a CEO run the operations." United Breweries (UB), Mallya's flagship company and also his acquisition vehicle (it recently acquired White & Macay, the No. 1 spirit maker in the world) is purchasing 26% stake in the Bangalore-based Deccan Aviation, which operates Air Deccan, for a sum of Rs. 550 cr. The deal will be executed through United Breweries (Holdings) Ltd., a UB Group company, which operates Kingfisher Airlines. Quoting an aviation analyst, Financial Express reported that "Stake purchase in Deccan Aviation will give Mallya a huge power in terms of regulating prices in the market. Kingfisher, which caters to the premier market segment, will now also control 64.5% of the low-cost market commanded by Air Deccan. This deal will have a big impact on the industry in determining the airfares, which Jet Airways could not influence through the acquisition of Sahara, which was also a full-service airline." Mallya, who made a vain bid to acquire Sahara Airlines last year . He must be a happy man now, as finally his dream of a consolidation has come true. |
