Bangalore: No-frills airline Air Deccan today (Aug 25, 2004) launched its operations on the profitable trunk routes at slashed rates to take on the major domestic airlines, while announcing that it would increase its fleet strength to over 33 aircraft from the existing nine in two years.

"We have signed for acquiring 11 airbus aircraft and also an additional five ATR aircraft, which will add to the existing six ATRs," Air Deccan Managing Director G R Gopinath told in Bangalore.

He said about five Airbus aircraft has been leased from a Singapore firm, while the airline would buy six aircraft from Airbus, of which the order for two were firmed up recently.

Air Deccan, Gopinath said, had earned a revenue of Rs 70 crore during 2003-04, the first year of its operations, and aims to quadruple revenues to Rs 500 crore this fiscal.

"We have achieved break-even four years ago. We will earn modest profits this fiscal," he said. Gopinath said the airline faced hurdles from established players when it announced its intention to expand into trunk routes from being a low cost airline in feeder routes.

"Everyday we have faced obstacles. They need to cut their flab and be competitive, they can't play political games," he said.

Gopinath said the airline had introduced dynafare, of which a certain seats were priced at Rs 500 and would gradually increase to about 80 per cent of the fare of established players.

Air Deccan, he said, would introduce no-frills service from Delhi from next month.

Clarifying on how the airline cut costs, Gopinath said, on an Airbus aircraft, the firm would have 180 seats, (22 per cent more seats) than the 142 seats of Indian Airlines or 145 seats of Jet airways.

"We fly the aircraft from point to point, not adopt the hub and spoke model of other airline, which helps us in 30 per cent more utilisation of the aircraft," he said.

Air Deccan, he said, had about 2,500 agents but each of them had to pay in advance for buying the ticket, instead of the traditional model of agents and high commissions. "By this we save about 18 per cent in distribution charges."

"The cost savings is about 50 per cent through this," he said.

Gopinath said Deccan Aviation, the helicopter charter firm had started a subsidiary in Sri Lanka with local partners and this was the first charter aircraft firm in the island nation after the Colombo airport attacks a few years ago.