Air Deccan A-320 aircraft on the tarmac at Bangalore airport before its flight to New Delhi on Wednesday. (AFP)

New Delhi, Aug. 25: Air Deccan, a no-frills domestic airline recently launched with an eye on upwardly mobile travellers, is expected to offload 15 to 20 per cent stake to fund its expansion plans.

The private carrier is expected to raise between Rs 230 crore and Rs 345 crore through the stake sale, which officials said would be utilised to buy or lease up to 11 aircraft made by Europe’s Airbus.

N. M. Rothschild has been named advisor to scout for private equity.

Air Deccan, which competes with state-run Indian Airlines and private Jet Airways and Air Sahara, today launched its flights linking Bangalore, Delhi and Mumbai at cut-rate ticket prices, which is about 30 per cent less at Rs 7,000 than the established airlines. Reservations for flights can be booked through the Net as well as through its call-centre.

“We would progressively start the other legs, which includes cities like Chennai, Guwahati, Bagdogra by the month-end,” said Captain G. R. Gopinath, managing director of the private-carrier, adding, the airline has been reporting a higher load-factor of about 83 per cent.

“Aviation is an integral part of the national economy. India is a country of over one-billion people and I consider them at one-billion potential customers...all are not hungry,” he said. “The aviation industry must improve its infrastructure facilities at airports so that more people can travel.”

At present the domestic aviation industry has only about 1.5 crore passengers, so the potential of private airlines is huge, Gopinath said.

Deccan Aviation, which retails tickets through a sells-model called ‘dynamic pricing yield management’ expects to close the year to March 2005 with a revenue of Rs 575 crore, up from Rs 100 crore in the previous fiscal to March 2004.

As per the model, the first 45 seats on every flight can be purchased at prices between Rs 500 and Rs 3,000, while the next range of 90 seats would be available for Rs 3,000 and Rs 5,000. The third bracket of tickets would be the costliest and range between Rs 5,000 and Rs 7,000.

The Bangalore-based Air Deccan has so far been operating shorter route flights in southern India, which helped in higher aircraft utilisation. The lower cost of tickets is also due to an absence of in-flight services and higher seating capacity. Officials said internet bookings has helped cut costs dramatically.