Air Deccan MD Captain Gopinath (right) with COO Warwick Brady in Mumbai on Thursday. (Fotocorp)

Mumbai, May 11: Air Deccan ? the country?s first low-cost, no-frills airline ? plans to emulate Ryanair?s strategy of not levying a fuel surcharge on its air fares.

Air Deccan joined other airlines recently in slapping a Rs 300 fuel surcharge levy in response to rising prices of aviation turbine fuel (ATF).

But it doesn?t intend to have the levy around for very long, emulating Ryanair which has sworn never to levy a fuel surcharge even if jet fuel prices continue to mount.

?Oil prices can double again to $150 per barrel and Ryanair still won?t apply fuel surcharges,? it said in an April 18 filing with the Securities and Exchange Commission (SEC) of the US.

RyanAir is the only major airline in Britain that guarantees no fuel surcharges. Its doggedness is unique since it is one of the very few airlines in the world that has desisted from slapping a levy to offset rising jet fuel prices at a time when an airline like British Airways has raised its fuel surcharge seven times since May 2004.

Air Deccan isn?t just following RyanAir?s lead: it has already recruited Warwick Brady, former head of operations at Ryanair, as its chief operations officer. It intends to phase out the fuel surcharge that it recently levied on its airfares across all sectors.

?While it is necessary for us to levy a fuel surcharge in the initial years of operation, we will surely phase it out over a period of time,? said Brady.

Company officials said the airlines will factor in a part of the cost in the basic fare and will thus not have to levy the surcharge separately.

Air Deccan also plans to adopt Ryanair?s strategy of raising its ancillary revenues, which includes income from advertising, both indoors and outdoors, excess baggage, food and beverages, several partnership tieups and others. ?Ancillary revenues account for 3 to 5 per cent of revenues. We will continue to innovate and generate other ways to enhance the contribution,? said Captain Gopinath, managing director of Air Deccan.

Deccan Aviation Ltd, which operates Air Deccan and a private helicopter and airplane chartering services, will hit the primary market on May 18.

The company will issue 2.25 crore shares through the book building route. The price band for the issue has been fixed at Rs 150 to Rs 175.

The company proposes to raise Rs 368.19 crore at the lower end and Rs 429.55 crore at the upper end of the price band. The issue will constitute 25 per cent of the fully diluted post issue paid up capital of the company.

The company proposes to utilise the funds in setting up a training centre at Bangalore, setting up a hangar facility for basic and medium level maintenance checks at Chennai and setting up infrastructure at airports.

The company will also use the funds in carrying out market development initiatives, setting up infrastructure at airports, debt repayment and general corporate purposes.