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Accenture favours Deccan merger

Mumbai, Dec. 18: Consulting firm Accenture favours a merger between Kingfisher Airlines and Deccan Aviation to fully exploit synergies between the two.

Accenture will present the findings of a study to the board of the Bangalore-based low-cost carrier tomorrow.

The development comes only months after the UB group picked up a 26 per cent stake in Deccan Aviation and later ramped it to 46 per cent following an open offer.

Soon after this, Accenture was appointed to look into certain areas, including the integration of manpower and elimination of duplication of manpower or services apart from deployment of personnel effectively.

Though full details of the Accenture report were not available, it is learnt that the consulting firm has called for a merger between the two.

In other words, Kingfisher Airlines will be merged into Deccan Aviation, shares of which will be issued to shareholders of the former.

Vijay Mallya, who heads the UB group, had in the recent past said that further steps would be taken based on the report submitted by Accenture.

Aviation circles feel that Mallya will be keen on a merger of the two due to many benefits that it could bring about. The prime among them is that Kingfisher Airlines can ride on Deccan Aviation to fly overseas.

Present rules say that an airline should have completed five years of operations to be eligible to fly overseas. Deccan Aviation will be eligible to fly in August. With Kingfisher Airlines getting two wide-bodied aircraft by June next year, aviation circles feel that Mallya will be keen to wind up the merger as fast as possible and that it should be concluded before March next year.

Sources said the board of Deccan Aviation will consider the report after the company’s annual general meeting in Bangalore tomorrow.

The possibility of a merger has fired up the Deccan Aviation stock in recent times.

On the BSE today, the share ended up 11.50 per cent at Rs 316.60.

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