AFP
New Delhi / Bangalore, May 4: Air Deccan, India's largest budget airline, denied on Friday that liquor baron Vijay Mallya's Kingfisher Airlines had made an offer to buy the company in a bid to become the country's top carrier.
"This is mere speculation, there's no truth in it at all," said a spokeswoman for Air Deccan in Bangalore, where both carriers are based.
Kingfisher Airlines spokesman Prakash Mirpuri said he would have to check with Mallya, who was abroad and could not be reached for immediate comment, before he reacted to media reports of a possible takeover.
A private news channel on Friday said the two companies were in talks.
That came a day after a national daily reported that a team from Kingfisher was scrutinising the books of Air Deccan, which reported a loss of 2.13 billion rupees in the quarter ended March 31.
A deal would create an airline that would control 38 percent of India's domestic aviation market, overtaking the 33 percent share of Jet Airways, which last month bought rival Air Sahara for 14.5 billion rupees (338 million dollars), the report said.
Jet Airways plans to turn Air Sahara into a budget carrier called Jet Lite to tap the low-fare segment that has contributed to 20 percent annual growth in India's aviation industry over the past four years.
Some analysts have speculated that Kingfisher Airlines, which bills itself as a "full service, true-value" carrier, plans to follow suit by buying Air Deccan, whose purchase would give it a combined fleet of 64 aircraft.
From just three in 2003, the number of airlines in India has jumped to 10, with several carriers joining the fray to profit from a boom in air travel that is expected to more than double the domestic market size to 60 million passengers by 2010.
Jet Airways, Indian Airlines and Air Sahara were joined by Air Deccan, Kingfisher, SpiceJet, Paramount Airways, Go Air, IndiGo and Indus Airways, with more such as Easy Air, Trans India and Air Dravida seeking government approval to take to the skies.
Competition in India's airline sector has caused the cost of air travel to fall, but has also squeezed profitability and paved the way for a wave of consolidation through closures and mergers, an industry report released in February said.