Budget airline Deccan Aviation spurted 14% to Rs 149.60 boosted by reports Vijay Mallya, founder of Kingfisher Airlines, was close to buying it out.

On BSE, 30.9 lakh shares were traded in the stock.

The stock had vaulted early this month when NSE announced on 9 May 2007 about the inclusion of a total of 31 stocks in futures & options segment, Deccan Aviation being one of them, with effect from 14 May 2007. From Rs 109.60 on 9 May 2007, the stock had risen to Rs 121.90 on 14 May 2007.

It had slipped to Rs 116.85 on 15 May 2007, before recovering to Rs 118.40 on 16 May 2007. The stock had vaulted 22.8% to Rs 145.40 in a single trading session 17 May 2007. It had pared gains later. It had settled at Rs 131.05 on Wednesday, 30 May 2007.

Deccan Aviation posted a loss of Rs 213 crore in the third quarter ended March 2007, attributing it to high operational costs and oversupply leading to weak domestic yield. The airline had notched a profit of Rs 9.64 crore supported by non-passenger revenue in the preceding quarter.

Revenues were up 66.34% to Rs 457.45 crore over March 2006 quarter. The airline improved its load factor to 83% from 71.75%, flew 1.7 million passengers as against 1.07 million and operated 350 flights per day as against 230 flights in the corresponding period last year.

Deccan Aviation said certain one-off costs relating to migration of central reservation system and reduction in ASKMs (available seat kilometres) to enable bunching of maintenance programme also resulted in losses. These measures are expected to enhance operational and financial performance in the coming quarters, it said.

The Deccan Aviation's board also decided to hive off the charter services into a separate entity through a wholly-owned subsidiary and transfer the maintenance and repair facility to a separate entity.

Deccan Aviation has given a mandate to Edelweiss Capital to raise $50 - $100 million to fund its fleet expansion, build on-ground infrastructure, and strengthen its training and engineering capabilities.

Fast-expanding Indian carriers are resorting to debt and dilution of equity to compete in a market rife with discounts and falling airfares.