Air Deccan, the Bangalore-based, low-cost air carrier, has posted a loss of Rs 213 crore for the third quarter ended March 2007, attributing it to high operational costs and oversupply creating a weak domestic yield.

In the preceding quarter, the airline had posted a profit of Rs 9.64 crore supported by non-passenger revenues.

With negative margins, expanded operations have added to the losses. Revenues for the quarter were up 66.34 per cent to Rs 457.45 crore over the corresponding quarter of the last year.

The airline improved its load factor to 83 per cent from 71.75 per cent, flew 1.7 million passengers against 1.07 million and operated 350 flights a day against 230 flights in the corresponding period last year.

G R Gopinath, managing director, Deccan Aviation, said, "Fuel prices are once again close to historically high levels coupled with the fact that February and March are inherently weaker months for the travel industry."

"We were further impacted by certain one-off costs relating to migration of our central reservation system and reduction in available seat kilometres (ASKMs) to enable bunching of our maintenance programme. These measures are expected to enhance our operational and financial performance in the coming quarters," he added.

The airline at its board meeting decided to hive off the charter services into a separate entity through a wholly owned subsidiary and transfer the maintenance and repair facility into a similar separate entity.