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India: (CAPA) Dr Vijay Mallya, Chairman and CEO of Kingfisher Airlines and CAPA's Aviation Executive of the Year, explained the importance of Kingfishers acquisition of low cost carrier, Air Deccan, to the Indian airline sector in the Outlook Summit's Keynote address.
Interim results show that the synergies between Kingfisher and Deccan have resulted in cost performance improvements that have defied popular predictions. Dr Mallya stated, however, that the biggest winner from the deal will prove to be the national airline industry.
Dr Mallya explained that, prior to the arrival of Deccan on the scene, the prevailing fare from Bangalore to Delhi, a route operated by three carriers, was INR12,000. With Deccan's emergence and the impact it had on prices, the average ticket cost only INR2,500. This, he explained, may have stimulated the market and generated a lot of excitement, but it also created "a lot of balance sheets splashed all over with red ink."
The CEO said that with the combining of forces, he will be able to offer "both the lowest fares in the market, as well as the highest". There are now three major groupings – Air Deccan/Kingfisher, Air India/Indian and Jet Airways/Sahara. Because these three groups control 83% of the domestic market, there will be a return to sustainable pricing and operations.
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Mallya: Kingfisher-Deccan merger a seminal event for Indian industry 
