Analysis of Air Deccan :: essays research papers

Analysis of Air Deccan Air Deccan was established in 2003 and started operations in August that year with regular scheduled flights from Bangalore to Mangalore and Hubli. The following month, it opened a second hub at Chennai. Air Deccan became the first private Indian operator to fly Airbus aircraft when it deployed the first of 5 leased Airbus A320s in July 2004. It was the first airline in India to link second rung cities like Coimbatore, Hubli, Madurai and Visakhapatnam to metros like Bangalore and Chennai. Barely two years into its operation the no-frills airline, Air Deccan, has grown from one aircraft to 19 and from one daily flight to 123. It has placed a $1.1 billion order with Airbus and will get an aircraft a month for the next 64 months. In its first full year of operation, ending in March, the company flew 1 million passengers and had revenues of $75 million. Projected revenue for this year: $250 million. Also, in 2004 the company raised $40 million in private equity from ICICI Venture Funds Management, India's largest private- equity player, and Capital International, an arm of the huge Los Angeles money manager Capital Group. Air Deccan is looking to go public over the next few months. "This is not the story of Air Deccan's growth--it's the story of the growth of India," says Gopinath. His success in the fast-growing aviation industry has set off a gold rush. Two new airlines--Delhi-based SpiceJet Limited and beer baron Vijay Mallya's Kingfisher Airlines--started flying in recent months. Several new players are waiting in the wings--including Indigo, backed by U.S. Airways' former chief Rakesh Gangwal, and GoAir, which is backed by Jeh Wadia from the controlling family of the giant Bombay Dyeing & Manufacturing. "Everybody knew that India was a big market--but Gopinath went out and actually proved it," says Kapil Kaul of the Center for Asia Pacific Aviation, a consultancy. "He led the way--and led it successfully." The man behind the upstart airline traces his roots to a village in the southern Indian state of Karnataka, where his father was a schoolteacher. His own education veered into nearly eight years in the Indian army. Tired of regimentation, he veered again, into silk farming on a family plot. The transition from the cocoon to the cockpit came in 1995 when he teamed up with a friend from his army days, Captain K.