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Air Deccan, Deccan Aviation Private Limited's low-cost airline, is in talks with UK's Virgin Atlantic Airways, to sell its equity.
G R Gopinath, managing director of Air Deccan, confirmed that negotiations were on with Virgin.
"We have been holding discussions with Virgin since the days of the National Democratic Alliance government when talks on allowing foreign airlines to buy stakes in their Indian counterparts had begun and while our discussions had reached an advanced stage with Virgin officials, there was a change of guard at the Centre. Now to divest our equity to any foreign airline, we have to wait for a possible change in the existing civil aviation policy," said Gopinath.
Air Deccan, which is planning to sell 30 per cent of its equity to a foreign partner, has appointed investment bankers Rothschild, as advisor to facilitate the smooth induction of an overseas partner.
Selling 30 per cent of its equity would fetch the company around $75 million which it plans to invest towards fleet expansion.
Over 21 per cent of the airlines equity is being held by Gopinath who is the highest stakeholder.
The company also plans an initial public offering in the near future.
Meanwhile, Virgin (strategy) head, David Huttner who had come to New Delhi in July had expressed his willingness to enter the Indian market by acquiring stakes in an Indian carrier.
Huttner while addressing a press meet had urged the government open up its domestic aviation sector to foreign carriers.
He had also indicated that talks with Indian companies were on, without mentioning any specific names during his speech.
Air Deccan will introduce five new aircraft by the end of this year. Two aircraft will be inducted into the fleet in September, two in November and one in December this year.
Air Deccan is targeting a turnover of over $125 million by the end of the current financial year, while the company has reported a turnover of Rs 100 crore (Rs 1 billion) for the year ended March 2003.