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Akasa Air aims to be profitable in 2 years, plans to expand domestic and international ops

The airline's plans to rapidly expand operations were tripped up by supply chain issues. But those seem to have been largely resolved, and it now expects to start taking delivery of the 150 Boeings it had ordered by 2027.

August 09, 2024 / 07:31 IST
Boeing deliveries on track as India's Akasa goes international, CEO says

Despite its operational performance, Akasa Air is still two years away from profitability as the airlines is looking to  expand its services  in the domestic and international markets.

On August 2, Akasa Air's Chief Financial Officer (CFO) Ankur Goel said that the airline is looking at becoming profitable in the next two years, and has plans for aggressive capacity addition and expansion to new destinations.

“As the RASK (revenue per available seat kilometre) continues to improve and CASK (cost of available seat kilometre) continues to go down, it (turning profitable) will happen very soon, and faster than our expectations. Our FY25 numbers will be better than FY24, and we're looking at being profitable by FY26. IndiGo took four years to become profitable, we won’t be very far from that number,” Goel said.

Akasa’s parent SNV Aviation had posted a net loss of Rs 744 crore in FY23. The FY24 financial data of the company will be available in a few weeks.

In a market where other airlines regularly make headlines for the wrong reasons, Akasa Air's record for operating safe and timely flights since it started operations two years ago on August 7, 2022, has been commendable.

However, the Bengaluru-based airline, which prides itself on its operating standards, eco-friendliness, and attention to detail still has a long way to go before it can truly establish itself as one of the pillars of Indian aviation.

The Akasa Air story

If we compare with the data for the first two years of other carriers like IndiGo, SpiceJet, and Go First, Akasa Air  has managed to  grow its operations faster than others. It has also managed to cater to niche markets, like that for travellers with pets,  with its in-flight pet policy .

Akasa Air two year performance Akasa Air two year performance

The airline has the world's most fuel-efficient CFM International LEAP-1B engines, which reduce fuel use and cut emissions by 20 per cent. Besides, the Boeing 737 offers 20 per cent lower airframe maintenance costs.

Based on data shared by the Directorate General of Civil Aviation (DGCA) since January 2023, Akasa  has had the best on-time performance (OTP) among  scheduled domestic airlines in four metro airports, viz, Bengaluru, Delhi, Hyderabad, and Mumbai in 11 of the last 19 months,  and been second-best in four months.

Since launch, the airline has also had a clean sheet in terms of fines by DGCA for operational issues.

In June last year, the airline introduced a new in-flight food and beverages menu for passengers across its network, with 60 new meal options curated by chefs from across India. It has also taken part in the government’s initiative of promoting millets.

The airline has flown over 10 million passengers since launch. Currently, it connects 26 destinations, including four overseas. It will start flights to Kuwait from August 23.

Fleet expansion

The airline's plans to rapidly expand operations have faced disruptions due to supply chain issues, chaos at Boeing, and increased competition for aircraft deliveries. The airline had initially planned to have a fleet of 28 aircraft by March 2024, but had taken delivery of only 24.

Chinese airlines, which had initially gone slow on aircraft deliveries due to Covid, started taking deliveries of Boeing aircraft in 2023. Akasa Air now expects Boeing 737 MAX 10 deliveries by 2027. The airline had ordered 150 737 MAX narrow-body planes in January 2024, including the MAX 10 and MAX 8-200 versions.

Aggressive pilot recruitment

The biggest glitch in Akasa Air's ops so far was in August and September 2023, when the airline was forced to cancel nearly 700 flights after 43 pilots exited  for rival carriers. Akasa's  low flying hours was said to be a major reason for the exodus.

Per the DGCA's flight duty-time rules, Akasa  needs to have about 12 pilots (plus two-three in case of emergencies) to operate each aircraft. With 24 aircraft, the  airline needs about 350 pilots to operate its fleet. But Akasa has close to 800, resulting in lower flying hours per pilot, impacting their pay and promotion prospects.

Last week, Akasa founder Vinay Dube asked his pilots to be a "little more patient." While the airline's management is confident of its ability to keep the pilots happy, this brewing issue could imperil the  future of a promising new player in Indian aviation.

Yaruqhullah Khan
first published: Aug 9, 2024 07:30 am

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