Akasa Air eyeing expansion in Karnataka, Maharashtra, Goa, Kerala

Akasa Air currently connects eight cities in central and southern India and flies nearly 63 percent of all its flights in these states.

The newest carrier in Indian aviation, Akasa Air, is eyeing network expansion into Karnataka, Maharashtra, Goa, and Kerala, officials aware of the airline's plans told Moneycontrol. Akasa Air expects Go First to vacate some prime slots in these four states, even if the latter resumes operations later.

"The plan is to increase flights from Maharashtra, Karnataka, Goa, and Kerala over the next six months to tap into the regional demand in these states, now that an opportunity has arisen," an official said.

The airline will aggressively bid for slots at Mumbai's Chhatrapati Shivaji Maharaj International Airport, Pune Airport, both the airports in Goa -- Dabolim Airport and Manohar International Airport -- Cochin Airport and Thiruvananthapuram Airport in Kerala, and Mangaluru Airport and Bangalore's Kempegowda Airport in Karnataka.

"Akasa Air will look to aggressively bid for any slots that may come up for grabs as part of our expansion plans which align with the future plan to expand internationally as well," a source said.

However, Akasa Air's plans are contingent on the government implementing new changes in the Slot Allocation Guidelines, 2013 soon.

Go First's inability to use its slots at airports due to its voluntary insolvency is expected to put the carrier's slot up for grabs in the upcoming winter schedule, which starts in November.

Go First's slots will remain with the airline until March 2024 under the current laws, until the new guidelines proposed by the ministry are implemented.

The government cannot take away slots of Go First before a year under the current Slot Allocation Guidelines.

Slots were proving to be a hurdle

Another source said that Akasa Air was just waiting for an opportunity to increase flights on some of its most profitable routes out of the southern states but was struggling to get slots for the same.

"Bengaluru-Kochi, Mumbai-Goa, and Pune-Bengaluru are some of Akasa Air's most profitable routes and the airline would love to increase flights on these routes," the second official said.

He added that Akasa Air is also seeing its highest ancillary income for inflight service from its routes catering to southern states. Emails sent to Akasa Air remained unanswered at the time of publishing.

Go First leaves a supply gap

Go First's decision to file for voluntary insolvency on May 2 has left a supply gap in India's domestic aviation as the airline has stopped all operations.

Till now, India's largest airline, IndiGo, has been the biggest beneficiary of the grounding of Go First, as the former gained 390 basis points of market share in May, capturing its highest-ever market share of 61.4 percent.

Most of Go First's market share of 6.4 percent, carrying 8.29 lakh passengers in April, went IndiGo’s way last month, as the latter carried 7.04 lakh more passengers in May, compared to April.

Go First has a sizable presence in Maharashtra, Karnataka, Goa, and Kerala, and if the airline does not resume operations soon, its slots will be up for grabs in these states.

"Go First has a significant presence in Mumbai, Dabolim, Bengaluru, and Kochi, which will be up for grabs if the airline does not fly again," an industry analyst said.

Slot allocation guidelines

Airport slots in India are currently reviewed after two seasons or a year, but these rules are expected to change soon. The civil aviation ministry in November had proposed changes in the Slot Allocation Guidelines, 2013 which propose that the usage of slots has to be reviewed every season.

Under the new proposed rules, the ministry is looking to use "previous season" instead of "previous equivalent season" when allocating slots to airlines in India.

What this means is that domestic airlines in India will lose their allocated slots at airports if they are not able to fulfill the 80 percent criteria to operate on those slots.

A slot is a permission given by a coordinator for a planned operation to use the full range of airport infrastructure necessary to arrive or depart at an airport on a specific date and time.

The issue of slot allocation is being addressed at a time when major airlines in India are struggling to operate 100 percent of their fleet due to delays in deliveries of engines by Pratt & Whitney.

Akasa Air’s network

Akasa Air currently connects eight cities in central and southern India and flies nearly 63 percent of all its flights in these states.

It flies to Ahmedabad, Pune, Mumbai, Bhubaneswar, Kochi, Bengaluru, Hyderabad, Chennai, Bagdogra, Delhi, Visakhapatnam, Goa, Guwahati, Agartala, Varanasi, Kolkata and Lucknow.

The carrier’s CEO Vinay Dube has also spoken about placing a significant aircraft order later this year, along with plans to start international operations.

Dube had said that the order will be for narrow body aircraft only. So, one could expect Akasa to continue with its core business strategy of sticking to mainly domestic routes, alongside medium-haul international sectors in the foreseeable future.

Akasa launched operations in August 2022 and operates a growing fleet of Boeing 737 Max 8 aircraft. It currently operates 110 domestic flights a day to 17 cities, with a fleet of 19 jets.

Akasa has said that, by March 2024, its fleet will grow to 28 aircraft.