Air Deccan rules out sale to beer billionaire

Air Deccan rules out a sale to Vijay Mallya, saying a combination of the two airlines would make no cultural or business sense.

business Updated: May 08, 2007 12:37 IST

Air Deccan, India's largest low-fare carrier, on Tuesday ruled out a sale to billionaire Vijay Mallya, saying a combination of the two airlines would make no cultural or business sense.

"He may want to buy the moon but the moon may not be available for sale," Air Deccan chief GR Gopinath said in Bangalore, a day after Mallya said his Kingfisher Airlines was interested in buying the no-frills airline.

"We are from different planets; he is from Venus, I am from Mars," Gopinath added in the city where both airlines are based. "We are from the opposite ends of the business spectrum, consumer models and consumer space.

"We are mining the bottom of the pyramid, he is picking the cream off the top."

Gopinath, who is known to his airline employees as Captain Gopi, said there was "absolutely" no chance of Air Deccan selling a stake to Kingfisher.

"They can't co-exist (in any merged entity)," he said. "One airline will only kill the other."

Still the bespectacled, low-key entrepreneur said he got along well with Mallya, a flaymboyant tycoon who has named his airline after the flagship beer brand of his UB Group.

"We are good friends and enjoy drinking a beer together," Gopinath said. "But that's about all. Our vision and philosophy are totally different."

Mallya said on Monday in New Delhi, at a press conference with Airbus Industrie, that he was interested in buying Air Deccan but an acquisition was not imminent.

Air Deccan last week denied media reports that it was in talks with Kingfisher Airlines.

The budget carrier reported a loss of 2.13 billion rupees (52 million dollars) in the quarter ended March.

A deal would create an airline that would control 38 per cent of India's domestic aviation market, overtaking the 33 per cent share of Jet Airways, which last month bought rival Air Sahara for 14.5 billion rupees.

Jet Airways plans to turn Air Sahara into a budget carrier called Jet Lite to tap the low-fare segment that has contributed to 20 per cent annual growth in India's aviation industry over the past four years.

Analysts have predicted that a wave of consolidation in the airline industry is inevitable after the number of domestic carriers proliferated, leading air fares to drop sharply but squeezing profitability.

From just three in 2003, the number of airlines in India has jumped to 10 as the boom in air travel is expected to more than double the domestic market size to 60 million passengers by 2010.

First Published: May 08, 2007 10:21 IST