Consolidation in the Indian market has taken another step forward with Kingfisher Airlines parent UB Group starting to transform the operations of Air Deccan after lifting its stake to 46%.
In June UB Group acquired 26% of cash-strapped low-cost carrier Air Deccan through the purchase of new shares, which made it the largest single shareholder. Indian securities rules required it to make an open offer for at least 20% more and it has now increased its stake to 46%. UB chairman Vijay Mallya, who is also chairman and chief executive of full-service carrier Kingfisher, expects to eventually have majority ownership of Air Deccan. He says securities rules permit UB to buy 5% on the open market each year and it plans to do so.
In the meantime, UB is already transforming the operations of Air Deccan, which is now being referred to only as "Deccan". Its corporate identity is being changed and its aircraft livery is being re-worked to adopt the red and white colours of Kingfisher Airlines with its kingfisher bird logo. The change will also be applied to Deccan's website, passenger coaches, ticketing counters and the uniforms of its ground staff and cabin crew.
UB says Deccan is being transformed from a low-cost airline into a "value-based low-cost carrier". Instead of having outsourced airport staff, ground functions are being brought in-house, and instead of there being harsh restrictions for flight changes or cancellations a "customer-friendly" policy has been rolled out allowing passengers to change their flights more easily.
Deccan is also enhancing its limited in-flight menu and hot meals will soon be provided. Water will be provided on a complimentary basis, aircraft seats will be covered in leather rather than fabric and airport coaches are being upgraded.
Meanwhile, Kingfisher rival Jet Airways is transforming newly acquired Air Sahara into an all-economy, few-frills operator. Jet says the full rebranding of Air Sahara as JetLite and the reconfiguration of its aircraft will be completed by March. Jet expects the subsidiary to be profitable by the end of the year.
Source: Airline Business
