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| 'We should become bigger than FedEx' | | Q&A: Captain G R Gopinath, Chairman & Managing Director, Deccan 360 |
| Sneha Kupekar / Mumbai Apr 17, 2010, 00:04 IST |
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 After selling Air Deccan, a low-cost carrier (LCC), to UB Group’s Kingfisher Airlines in 2007, Captain Gorur Ramaswamy Iyengar Gopinath started a cargo airline. Deccan 360 was in incubation for about 18 months before the sale of Air Deccan. A strategic partnership with Reliance Industries Ltd (RIL) has resulted in RIL investing between 26 and 50 per cent in the company. Capt. Gopinath spoke to Sneha Kupekar. Edited excerpts:
Deccan 360 is in the logistics business and that requires clockwork precision for transporting goods. What infrastructure do you have in place to ensure efficiency?
You can’t start a service without a good network. We currently have a fleet of eight aircraft i.e. five ATR’s and three Airbus, which fly to 15 airports. Deccan 360 has the capacity to handle 300 tonnes of cargo per night and has space in about 15 airports. We have over 60 warehousing hubs through exclusive franchisees from Amritsar to Thiruvananthapuram and Rajkot to Guwahati. It will take us just about a year to establish a hub in Jammu and Kashmir as well. All this coupled with about 1,000 vehicles that offer good surface connectivity, shows that we are already twice in size and reach of others in the business.
You had earlier said you would be looking at raising Rs 1,500 crore. Have you managed to raise that amount?
I may have mentioned some figures last year. We made an attempt to raise equity in 2009, but the financial tsunami resulted in many of the companies we were in talks with to go belly up. The market has picked up now, and we have started talks with investors again.
You were in talks with other potential investors as well. Why was RIL chosen?
RIL wasn’t chosen because it was the highest bidder, I would have been able to get a higher value. Business isn’t just about money. RIL comes with a background in world class execution of projects and they will help Deccan 360 scale up. We were also looking at a company who was going to invest and be there for the long haul. RIL fulfilled these criteria and they in turn invested because of their confidence in the ability of Deccan 360’s management.
How is RIL’s investment in Deccan 360 going to change the dynamics of the company?
We are not creating a company for RIL, we created a company for delivering efficient logistics. I have not sold a single share of mine, but I am not reluctant to dilute further if required. RIL is also willing to invest further if the need arises. Also, there’s going to be no change in the branding of the company. On the board front, Deccan 360’s board will now consist of two directors from RIL and three from Deccan 360. The two companies will work together in an integrated manner.
What are your plans for Deccan 360 after the initiation of a strategic partnership with RIL?
First and foremost, we will look at stabilising and strengthening our existing business. The two companies will be holding discussions from Monday on how to tap into each other’s resources such as retail and IT to grow together. We will be looking at the roadmap of how to scale up and at what pace. I feel the way forward is through small scale industries and real time management of goods. My dream is that every district headquarters should have a Deccan 360 connection. We should become bigger than FedEx.
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