Air Deccan flies into Rs 340 crore losses

Our Corporate Bureau
25 September 2006

Introduction of new aircrafts and new routes have helped Air Deccan to emerge as the second biggest domestic airline behind Jet Airways in recent months. But the growth has come at a heavy financial cost to the airline and its net worth has seen significant erosion.

Deccan Aviation Limited, which operates Air Deccan, has reported a net loss of Rs 340.55 crore for 15 months ended 30 June 2006, which is way above analyst estimates. Operating revenues were at Rs 236.39 crore for this period.

Air Deccan's managing director Capt. GR Gopinath toold CNBC-TV 18 that rising fuel costs have put Air Deccan through turbulent times.

"The aim was to deploy aircraft and gain market share so that when the turbulence is over, it will help us for future expansion and growth and profitability. We have deployed 20 aircrafts in the last 18 months," said Gopinath.

The company had extended its accounting period by three months for the last financial year as it has changed its accounting year to June-May from the current financial year.

The losses would have been even higher if the company had not resorted to accounting policies, to which the auditors have objected. The company has reported other income of Rs 115.41 crore for the 15 month period, of which its auditors have qualified an amount of Rs 49.03 crore. The auditors have also objected to deferring some expenses and not making provisions for balances or advances, which have not been confirmed by counter-parties.