Deccan Aviation to Cut Some Routes as It Seeks Profit

Air Deccan is ``rationalizing some routes'' and cutting back unprofitable capacity, Warwick Brady, Air Deccan's chief operating officer, said in an interview in Mumbai today. The Bangalore-based carrier aims to carry as many as 8 million passengers in 2007, compared with 4.5 million this year, he added. He didn't say which routes may be affected by the plan.
The airline recently sold and leased back two Airbus SAS planes and three spare engines, Brady said. Airlines benefit from so-called sale-and-lease back deals, as they get an injection of capital and no longer need to worry about the asset depreciating in value.
The company will consider similar deals for more planes, Brady said. Deccan Aviation has 92 planes on order, valued at $3.8 billion, to be delivered by 2012. Most of the planes are on order from Airbus.
Deccan Aviation has postponed a plan to start overseas routes using a joint venture in Sri Lanka, Brady said. The airline was to start operations at the Sri Lankan unit from September.
29/09/06 Anand Krishnamoorthy/Bloomberg

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