Deccan Aviation to break even soon

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MG Mohan Kumar, Director-Finance for Deccan Aviation says his firm witnessed a good load factor in December '06. Average revenue per passenger stood at Rs 3,100 for the month, which is at break-even levels, which shows that the yields are moving up.

 

 

He went on to add that though the airlines was able to realise Rs 2,800 from each passenger in the last quarter, it might not make profits in December due to ticket refunds worth Rs 35 crore.

 

 

Excerpts from CNBC-TV18's exclusive interview with  Kumar:

 

Q: Reports suggest that you could be breaking even in the Q3. Is that likely or would the fog over the last couple of weeks in December affect performance?

 

A: We spoke about December and usually this is a good month as well as a good season to travel. We had an excellent load factor built-up for the month. And because of fog in north India we had cancelled lot of flights and refunded almost Rs 35 crore of the booked tickets. The month would have become profitable and that is the statement it is not about the quarter it is about the month of December.

 

Q: Because of this refund of Rs 35 crore you may not make profits in December?

 

A: Yes.

 

Q: What was the ticket realization in December? Was it better than previous Decembers?

 

A: Yes, our average revenue per passenger has crossed Rs 3,000, which is close to break-even level, which shows that the yields are moving up.

 

Q: Did you cross Rs 3000 mark in December or in the quarter?

 

A: In the month of December it touched Rs 3,100 per passenger.

 

Q: How much do you see this will contribut towards the Q3 and going forward in the coming quarters?

 

A: The fare realization per passenger in the last quarter was approximately about Rs 2,800, which has been moving. In fact it is about Rs 100 more on the previous quarter; so we are witnessing increase in the average fare every quarter, which shows that the flights that we are operating are maturing.

 

Q: When you give estimates for break-even - cash break-even as well as the one in the previous quarter - did you factor this in or is it better than expected and so would you hope to break-even quicker than you earlier told us?

 

A: It is all about the market; the capacity getting absorbed in the market and the further capacity coming in the market. As of now we cannot predict the other players - what capacity they are bringing in and in which routes they are adding capacity - these are all things, which affect our plan. But we see a positive sign in the yields moving up, which is good for the industry.