Shares of Deccan Aviation [ Get Quote ] have doubled in a little over a month in anticipation of a reverse merger of Kingfisher Airlines [ Images ] into Deccan Aviation. Deccan shares climbed to a 52-week high of Rs 335 in intra-day trade on Wednesday, before closing at Rs 295.

Strangely, a day after Vijay Mallya [ Images ] announced his plan to merge Kingfisher into Deccan, the budget carrier's stock fell more than six per cent to Rs 277, even as the BSE Sensex gained 70.61 points.

Airline experts say Mallya has a tough job on his hands. "I don't know if this would work. Mixing everything in one company doesn't work. It will have a full-service airline, a no-frills airline, plus international operations under one umbrella,'' said an airline expert and investor.

History is not on Mallya's side. Full-service carriers and low-cost carriers (LCC) belong to separate worlds, and their DNAs seldom match. Whenever they have tried to merge or work together under one umbrella, they have nearly failed.

It happened when British Airways tied up with budget carrier Go, and when Delta Air acquired budget carrier Song. This, despite the fact that these were subsidiaries, whose operations were independently managed.

''Analysts and investors are paranoid about the features of the LCC model. They don't like even the smallest deviation,'' said a former airline executive who requested anonymity, as he was employed by one of the two airlines.

In fact, when Deccan planned an inflight magazine (to communicate with its customers and earn through advertising), investors were paranoid. ''They said why do you want to do it - it has a management aspect,'' said a former Deccan executive.

''The key question is whether you can successfully run a full-service airline, an LCC and international operations under one umbrella. It has been seen for many years that it doesn't work,''