Kingfisher Airlines Acquires a Stake in Air Deccan: The Indian Aviation Sector Moves towards Consolidation | Business Strategy Case Studies

Details

Case Code : CLBS090
Publication date : 2009
Subject : Business Strategy
Industry : -
Length : 04 Pages
Price : Rs. 100

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Key words:

United Breweries Holdings Limited, Kingfisher Airlines, Deccan Aviation Private Limited, Air Deccan, acquisition, shareholding, consolidation, Vijay Mallya, Capt. G. R. Gopinath, Ramki Sundaram, Jet Airways, Air Sahara, Air India, Indian Airlines, Indian, Kapil Kaul, Center for Asia Pacific Aviation, Indus View Advisors

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

Abstract:

This caselet discusses the increasing trend of consolidation among Indian domestic airline companies, with special focus on the Kingfisher Airlines-Air Deccan alliance. In the first half of 2007, three airlines in India had formed alliances. The caselet discusses the causes which led to alliances among the airline companies in India, and the consequences of those alliances.

Introduction

On May 31, 2007, United Breweries Holdings Limited (UBH), the parent company of Kingfisher Airlines (Kingfisher), a 'value carrier' based in Bangalore, acquired a 26 percent stake in Deccan Aviation Private Limited (DAP), which owned Air Deccan (Deccan), the pioneer of low-cost airline in India, also based in Bangalore.

UBH paid Rs. 5.5 billion to acquire the stake, which made it the largest shareholder in DAP.

UBH said that it would subsequently make an open offer to all the shareholders of DAP, for an additional 20 percent stake...

Kingfisher Airlines Acquires a Stake in Air Deccan: The Indian Aviation Sector Moves towards Consolidation*