Struggling Indian cargo carrier Deccan 360 has succumbed to mounting losses – totalling US$44 million at the end of the 2010 financial year – informing its nearly 600 staff of the need to downsize.
In an email to employees, the company said: “We have done our best to hold the company with minimal operations, but could not succeed due to business and funding constraints. Hence, we [have] opted for restructuring and are in the process of discussing with investors and lenders.
“As part of this process, we are requesting some of the employees look for alternative jobs though we would love to get them back in future. Also, if someone wishes to go on long leave without pay, as and when the company revamps, they can [come] back.”
The pioneer of India’s low cost carrier model, Capt. Gorur Gopinath launched Deccan 360 in an attempt to introduce a more professional local cargo carrier in the growing domestic cargo market. The company leased three A310Fs, one ATR 42-300F and three ATR 72-200Fs from Mauritius-based lessor Veling but these were returned recently because of payment defaults.
Gopinath forecast that the airline would achieve revenues of US$73.5 million by the end of the financial year 2010, but it only made $9 million, with losses utlimately mounting to $44 million. Gopinath blamed a lack of critical infrastructure in the country for the company’s inability to tap the growing cargo demand within India.