Deccan Aviation managing director G.R. Gopinath in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, April 20: Deccan Aviation is planning to diversify into cargos and chartered flights in this fiscal.

The company, which runs the low-cost airline, Air Deccan, will set up two wholly owned subsidiaries.

The newly appointed CEOs of the two companies were now preparing the business plans, G.R. Gopinath, managing director of Deccan Aviation, said.

Deccan Aviation runs the largest charter network of the country. Gopinath started his business through non-schedule charter only.

“We want to have separate companies focusing on three businesses — passenger, cargo and charter,” he said.

As separate entities, they will have greater freedom to tap capital.

Deccan Aviation is looking to raise between $50 million and $100 million through private placement of fresh equity shares.

The bids are being shortlisted by Deccan’s merchant banker Edelweiss Capital and the process will be completed in a month.

“I cannot say how much equity will be diluted since it is linked to price. Investors are looking at a veto power in the board,” he said.

Strategic investors would also be considered, Gopinath added.

The company is suffering losses worth Rs 300-350 per seat.

However, conditions are likely to improve by the third quarter.

“This year, we aim at improving the quality of service and becoming profitable,” Gopinath said.

Deccan Aviation will take delivery of 80 aircraft in as many months. It now sells 25,000 seats a day.

The number will rise with the addition of each new plane.

The company hopes that economy of scale would make the business viable in future.

A dedicated cargo operation would help it cut losses.