A clash of aviation titans at India's Air Deccan

(Fortune Magazine) -- Turbulence lies ahead at Air Deccan, India's largest discount airline. Vijay Mallya, the egocentric and charismatic owner of Kingfisher Airlines, who has paid $137 million for a 26 percent stake, thinks he will be in the pilot's seat. But so does G.R. Gopinath, Deccan's founder, who introduced air travel to tens of thousands of new passengers.

The deal makes Mallya the largest shareholder in Deccan Aviation, which owns the airline, and he hopes to pick up another 20 percent by buying stock. Gopinath says he can call on about 35 percent of the shares through business partners and friends.

Asked by phone from Miami whether he'll be in charge, Mallya told Fortune, "With a majority stake, that's pretty inevitable, isn't it?" He wants to end the vicious fare wars that have left all airlines bleeding.

"There is no question of cut prices continuing in India - everyone wants to raise fares. Deccan is widely regarded as a market spoiler, and that will stop!"

That may come as a shock to Gopinath, who says Mallya is only a "strategic investor," and that as chairman, he will carry on with cheap fares. He says Mallya told him, "Let me invest, and you run the airline."

Whoever wins, fares will have to rise, or India's airlines will continue to hemorrhage. Kapil Kaul, regional CEO of the Centre for Asia Pacific Aviation, estimates annual losses at $500 million.