The swap ratio of shares of Kingfisher Airlines Limited and Deccan Aviation Limited will be finalised by April, after which the former will merge with the latter, a Kingfisher official said.
Executive Vice-President of Kingfisher Airlines Rajesh Verma said that approval of the government and Sebi was awaited for the merger of the two airlines. Verma said that post the merger, Kingfisher would operate as a full service aircraft (FSA), while Deccan would continue to function as a low-cost carrier.
Although Deccan Aviation would cease to exist, the Deccan brand would continue as a brand differentiator, he told.
Based on a report prepared by Accenture, the two airlines had agreed on the merger. Verma said that Accenture was also looking at the management structure of the two companies. Their report would be submitted next month, he said.
While Vijay Mallya was the Chairman of the merged entity, Captain Gopinath was the Vice Chairman. Kingfisher would get delivery of five A340s and five A330s before August for its overseas operations.
During August, Kingfisher plans to start flights to New York and San Francisco by the end of August from Bangalore.
Verma said that since Deccan Aviation was already a listed company, Kingfisher would automatically get listed on the stock exchanges. "For this, there is no need for Kingfisher to float an IPO", he said.
Vijay Mallya, promoter of Kingfisher Airlines, had earlier said that the company would go for an IPO to fund fleet purchase plan. Asked how would Kingfisher would raise money, Verma said that the company would explore various options ranging from raising through private equity to hitting the capital market. "Nothing has been finalised as of now", he said. The merged entity would work on a combined summer schedule.
"We will have to optimise schedules and go for route rationalisation", he said. About Deccan, he said that Kingfisher had invested substantially in the low-cost carrier. "We are looking to improve standards of Deccan in spheres like in-flight services," Verma said.
Mallya controls nearly 49 per cent in Deccan Aviation. Kingfisher was also looking to fly to other overseas destinations such as Hong Kong and Singapore. "We have not got the dates yet," he said.
