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Rediff.com  » Business » G R Gopinath on his new venture, Deccan 360

G R Gopinath on his new venture, Deccan 360

Last updated on: February 3, 2011 12:21 IST

G R Gopinath on his new venture, Deccan 360

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Raghuvir Badrinath and Debasis Mohapatra

It has been more than a year since G R Gopinath, the pioneer of low-cost civil aviation in India, started his air cargo venture, Deccan 360, after exiting Air Deccan, which is now part of UB Group's Kingfisher Airlines.

After some initial take off turbulence, Gopinath is now actively steering the air cargo business steadily with equity infusion from Reliance Industries.

In a conversation with Business Standard, the chairman and managing director of Deccan 360 details the road ahead. Edited excerpts:

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Image: Air Deccan logo.
Photographs: Reuters.
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Gopinath on his new venture Deccan 360

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You must be facing a lot of problems even as you are steadying Deccan 360. Logistics in India is a big challenge and you are attempting to change the way it is perceived?

There is opportunity when there is crisis. When you put capacities for air cargo in one year, which is equal to the entire capacity India had in the last 60 years, there are bound to be problems.

Slowly we are ironing them out and things are stabilising. The load factor is inching towards 55 per cent across our fleet of three Airbus 310s with each having 38 tonnes capacities. Also, we have five ATRs, which connect into the smaller cities in India.

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Image: Capt. Gopinath.

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Gopinath on his new venture Deccan 360

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But Deccan 360 is up against global biggies such as DHL, Fedex and UPS, which are expanding. How do you intend to square up against them?

When the US witnesses annual business turnover of $60 billion in cargo business, Europe does about $37 billion and China about $8 billion while India has only about $500 million.

So, there are a lot of growth opportunities. When India is witnessing rapid economic growth, the pace of logistics growth should keep pace to support the growth phenomenon. In India, most of the cargo is under the belly of civil aircraft.

Global majors such as DHL, Fedex, UPS link India to the world and they are now expanding their reach. Blue Dart, under DHL, is the other major player with significant presence here.

What we are doing is building a huge network within India. With the economy growing at around 8 per cent, the need to reach goods in time is more important.

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Image: Deccan 360.

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Gopinath on his new venture Deccan 360

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Deccan 360 also had plans for overseas connectivity, linking India to West Asia and Southeast Asia. How is it panning out?

Our focus is connecting Indian cities and towns. We have daily flights between Delhi and Hong Kong and we also have a lot of cargo charters connecting various global locations including Hanoi, Shanghai, Tashkent, Uzbekistan among others. There is lot of demand in India which we are keen to address.

How has the equity infusion from Reliance Industries helped and how do you intend to leverage synergies as you move forward?

I think it's more of business insight. Barring that, there is a Reliance team which works with me on the strategic level. Whenever we want to build a hanger or need IT support, we plug into RIL that has a huge internal resource on its disposal.

Basically, business insight and skillful execution are the key ingredients, we seek for scaling up in the future. Mukesh Ambani has a vision that Deccan 360 should be better than world class in the cargo business and that's the kind of vision which inspires us all to forge ahead.

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Image: Deccan 360, big ambitions.

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Gopinath on his new venture Deccan 360

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When you raised equity from Reliance Industries, they were supposed to pick up stake up to 40 per cent based on certain milestones. Going forward, will Deccan 360 be known as a Reliance Industries-owned company?

Not necessarily. Reliance Industries through one of its subsidiaries has stake in Deccan 360, but we don't have any such plan of rebranding Deccan 360. I am a person who enjoys creating new things. So, I am not going to sell something only for money.

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Image: Capt Gopinath.

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Gopinath on his new venture Deccan 360

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There is strong buzz in the marketplace that you are close to raising another $25-30 million. How will you use the fresh infusion of funds and are there any plans to list Deccan 360?

We are not raising money as of now as we don't need it for expansion. We may look at it in the next six months if need arises. As far as capacity is concerned, we do have sufficient capacity for now.

So, our focus is on increasing connectivity in the next one year to various cities in the country. As such, we are adding one city every month in our bid to increase connectivity. We will also increase the number of hubs in the existing cities.

Regarding a public offer, we will think about that after necessary scale is achieved by the company.

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Image: Deccan 360.

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Gopinath on his new venture Deccan 360

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Kingfisher Airlines has also started its cargo service. Do you view competition from them?

I think, pure passenger airlines may not be able to cash in on the cargo business as efficiently as airlines with dedicated cargo services. But we do have the capacity and connectivity to face any competition in this space.

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Image: Vijay Mallya, Capt Gopinath.

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Gopinath on his new venture Deccan 360

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You tried to be part of political system when you competed in 2008. How do you want to take forward those plans?

I don't have political ambitions as such but want to be part of any change in the society.

I believe you have to share the tragedies of your time and if you want to overcome that, you have to be a change agent than sitting in the corner. I will be a part of such change initiatives in the future too.

Also, good governance and a healthy political atmosphere are the requirement for sustaining business growth in the country. The best charity in India one can do is to create jobs, and only healthy democracy can ensure such job creation in the country.


Image: Capt. Gopinath.

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