UPDATE 1-Deccan Aviation quarterly loss widens

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MUMBAI, Sept 28 (Reuters) - Deccan Aviation Ltd DECA.BO, which owns budget carrier Air Deccan, reported a wider net loss for the quarter to June 2007, hit by higher fuel costs and lower yields and other income.

Deccan, which had earlier forecast profits from the April-June 2008 quarter, said in a statement late on Thursday that its quarterly loss widened to 1.7 billion rupees from 1.1 billion rupees a year ago.

"We are currently in a turnaround mode... we are putting processes and systems in place to achieve sustainable, profitable growth over the long term," Chief Executive Ramki Sundaram said in a statement.

Deccan officials refused to comment further on the results.

The company also reported revenue growth of 26 percent, slower than previous quarters, to 5.03 billion rupees as new aircraft additions moderated.

While new planes increase capacity, Deccan also books a gain of about $3-4 million on sale and lease back of each Airbus aircraft, boosting other income. Deccan, which inducted six Airbus planes in 2006/07, added just one in the quarter.

Air Deccan flies 41 aircraft and has the country's largest network, connecting 65 cities and towns.

Fuel prices, which account for a third of an airline's cost, have continued to rise on the back of firm global oil prices, hitting airlines margins.