KINGFISHER AND DECCAN MERGER PDF

This case study is a sequel of the case titled, ‘The First Low Cost Carrier of India’ written by the present author in the year , when the homegrown airline Air. Accenture favours a merger between Air Deccan and Kingfisher Airlines. The Kingfisher Airlines-Deccan Aviation merger swap ratio has been fixed at This means shareholders in the UB group-promoted.

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Kingfisher & Deccan merge to form one entity

Thirteenth Annual report,Deccan Aviation Limited. Foul language Slanderous Inciting hatred against a certain community Others. We are looking at raising Rs 25 crore Rs million for the combined business and Deccan would be the surviving entity. But neither Kingfisher nor Jet Airways are 60 years old and the younger an airline is, the easier it is to change its footprint,” Forte said.

Aviation Consolidation Looming In India: The resultant negotiation power and costs saved in fuel and maintenance will be the added benefits. Parallels can be drawn from our acquisition of Whyte and Mackay this year. What is the expected range for the share swap ratio?

We plan to dilute about Rs 1, crore Rs 10 billion to take care of the next months’ requirements.

In fact, when Deccan planned an inflight magazine to communicate with its customers and earn through advertisinginvestors were paranoid. The criteria defined for this are laid down by the Supreme Court and will be based on the net asset value, mergger price and the discounted cash flows, which would be the deciding factors for reaching the ultimate swap ratios.

Order Reprints The reprints of this article are available at the rate of Rs. Both the airlines will retain their brand entities and also leverage respective business strengths.

We would aim to increase revenues on every flight we ,ingfisher. Meanwhile, the Wilbur Ross consortium is understood to be making efforts to renegotiate with IFCI to put in a bid though its officials maintain that legally, IFCI cannot entertain any offers from this process. Air Deccan, which has been struggling with growing losses ever since it started, is running out of cash almost as soon as it raises it.

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Given that Deccan acquired its aircraft at a cheaper price than Kingfisher did, it should not be a surprise if Mallya one day says no-frills airlines won’t work in India and we will have just one airline, Kingfisher Airlines. Trade unions have thrown their weight behind Tata Motors.

There is a demand for low-cost sensitive fare on the metro routes and drivers of business can be different at different timings. What we are looking at is an increase of Rs crore in the first six months in the bottom line once we launch the international operations. Ans the airline’s losses continued to mount, it was forced to sell a 26 per cent stake to Vijay Mallya for Rs crore Rs 5. How to cite item. But what we are looking at is that the world has changed dramatically and there is a pool of about 2.

However, inthe airline nose dived and Captain Gopinath, its CEO, had to succumb to the consolidation proposed by Dr. Only Payable at Par cheques are accepted. Fill in your details: An increase in the revenue through reduction in costs would follow because of the operation of an airline that will have about flights a day.

Whenever they have tried to merge or work together under one umbrella, they have nearly failed. A Survey Study in Mrrger Bengal views since: OutlookReport released, March 7,accessed on January 10, www. We expect savings of about Rs crore Rs billion annually to accrue because of the synergies achieved due to the merger.

Capt Gopinath on the future of Deccan. My Saved Articles Sign in Sign up. They don’t like even the smallest deviation,” said a former airline executive who requested anonymity, as he was employed by one of the two airlines. Annual reportKingfisher Airlines Limitedp. This study is, therefore, an attempt to elucidate the strategic anr made by the acquirer – Vijay Mallya to restructure and reposition the erstwhile Air Deccan into a new combined entity – Kingfisher Red.

Mallya is aware of these challenges.

Experts favour Kingfisher-Air Deccan merger

The raison d’etre for demerger of scheduled air services from Kingfisher Airlines into Deccan Aviation [ Get Quote ] is to preserve the tax offset. This will alert our moderators to take action. Jet Airways paid Rs 1, cr to buy the entire airline, in addition to Rs cr paid earlier by Jet as advances and interest.

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Airline experts say Mallya has a tough job kinhfisher his hands. Started inAir Deccan brought a revolution in air travel, making air travel in India an affordable proposition for the common man. The combined entity will also need large capital infusion for the proposed international forays by the two brands.

We would generate more revenue through our network strategy and good understanding of the consumers through the assets we have.

Kingfisher-Deccan merger: Will it work?

Call for Papers – Civil Engineering. The new bigger airlines will lead to substantial synergies, better productivity and lower operational costs, the merger will enable us to fly overseas from August next, especially across Europe and the US.

It will have a full-service airline, a no-frills airline, plus international operations under one umbrella,” said an airline expert and investor.

Furthermore, as the merger story unfolds, it brings out the truism of consolidation dedcan that one man’s gain is another man’s loss. This journal is a member of and subscribes to the principles of the Committee on Publication Ethics. References Mergers are called amalgamations, while Takeovers are acquisition of a part of equity capital of a company that enables the acquirer to exercise control over the affairs of the company.

Wnd miss a great news story! What is important for us at this point in time is that the merger has given us a flexibility of going international. In terms defcan percentages, our objective is not dilution, but raising required funds with the lowest valuation. Which is why he’s been trying to blur the differences with the makeover of Deccan.

We are talking to bankers. With combined accumulated losses of around Rs 2, crore Rs 20 billionthe new entity created by the merger of unlisted Kingfisher Airlines with Deccan Aviation will have many strengths, but its balance sheet will not be one of them.