Mallya now eyes SpiceJet
16 Jun 2007
Mumbai:
UB group chairman Vijay Mallya, who also heads Kingfisher
Airlines and acquired a 26-per cent stake in low-cost
carrier Deccan Aviation, is now eying budget airline SpiceJet
Ltd.
He said he is "interested" in acquiring the
airline, which offers budget fares.
"I have not initiated any talks as yet. But if they
want maximum shareholder value, they will look at me,"
he told business news channel NDTV Profit.
SpiceJet is India''s second largest low-cost airline with
a market share of nine per cent. It operates over 83 daily
flights in 14 cities with 11 Boeing 737-800 aircraft.
"I am certainly interested, and if you are asking
me if I am talking about it, the answer is no. Am I going
to get it? The answer is I don''t know," reports quoted
Mallya as saying.
Mallya''s latest move is part of the consolidation taking
place in the Indian skies. The aviation industry in India
has already seen two mergers with Jet Airways taking over
Air Sahara and the Indian Airlines being merged with Air-India.
"I respect the independence of the SpiceJet shareholders
and board. If they want to do something, I am sure they
will invite me to talk with them. If they don''t want to
do anything, we will just work together because a part
of my strategy in acquiring Deccan Aviation was to make
sure that the industry becomes more profitable and that
everybody works together to achieve that," Mallya
said.
SpiceJet, meanwhile, said it plans to sell 16 Boeing 737
aircraft for more than $1.1 billion to Nomura Babcock
& Brown Co Ltd., and lease them back again.
It had concluded a similar deal with the investment banker
for four aircraft earlier this year.
SpiceJet
had placed orders for 20 B-737 aircraft and deliveries
would be made over 22 months beginning January 2007.
The sale would be effected on delivery, the company said
in a notice to the stock exchange. Airlines typically
book a profit of between $2 million and $4 million by
sale and lease back of each plane, aviation industry players
said.
More
and more airlines are resorting to sale and lease back
of planes to fund expansion in a fast-growing market amidst
rising oil prices and increased competition.
Deccan Aviation Ltd has closed deals for four Airbus A-320
planes, while top domestic carrier Jet Airways Ltd sold
and leased back five aircraft in April.