BANGALORE, India, Oct 13, 2006 (AFP) – India’s biggest low-cost airline, Air Deccan, said Friday it has raised 4.5 billion rupees (100 million dollars) from two foreign banks to tide it over a financial crisis. G.R. Gopinath, Managing Director of Air Deccan, said the deal with British-based Banks Investec Bank and Germany’s Billon and HSH Nord Bank AG will be spread over 15 months and in four tranches.
“This deal would go a long way in ensuring Air Deccan’s financial stability and insulating us from the turbulence in the domestic aviation industry even as we aggressively pursue our growth and expansion plans,” Gopinath said.
The airline reported a 74-million-dollar loss for the 15-month period ended in June and said it was hit by costs of new routes and cut-throat competition from a raft of new entrants into the market.
Air Deccan, launched in August 2003, blamed the lion’s share of its loss on efforts to build market share through launching 56 new routes that it said would bring in profits by 2008-09.
“Air Deccan is well on its way to significantly improving its profitability levels,” Gopinath said.
He said the first of its 60 Airbus A320s, being acquired at a cost of two billion dollars, w