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Mumbai, Jun 2: The UB Group Chairman Vijay Mallya has indicated that fares of the low-cost carrier would go up as no one wants to run on losses.
 
"It may not happen immediately...but we are in business to make profits," Mallya told at a press conference held jointly with Air Deccan chief Capt Gopinath here.

There were a lot of synergies between the two airlines and costs were expected to come down, he said.

Ruling out the possibility of taking a 100 per cent share in Air Deccan, Mallya said: "As of now United Breweries Holdings has picked up a 26 per cent stake and it would make an open offer to acquire a minimum of 20 per cent to all shareholders of Air Deccan at a price of Rs 155 in compliance with SEBI regulations next week".

UB Holdings has made an initial investment of Rs 150 crore in Deccan Aviation and a further investment of Rs 396 crore would be made by this month-end for 26 per cent stake.

The new shares will be allotted at Rs 155 per share, representing around 10 per cent premium of the current market price of the shares of Deccan Aviation.

With this acquisition, the Kingfisher-Air Deccan group will become the largest domestic airline with a fleet of 71 aircraft -- 41 Airbus and 30 ATR aircraft.

The combined entity will cover all segments of air travel from low to premium fares and offer maximum number of 537 daily flights covering 69 cities, taking advantage of unparalled synergy benefits from a common fleet of aircraft.