As Akasa Air product strategy takes a hit, its network blueprint looks clearer

(Image: Akasa Air)

When Akasa Air starts services to Pune at the end of this month, it would become the third-largest domestic player in Bengaluru, the third-largest airport in the country by domestic traffic. Rarely has an airline been able to achieve such a feat. But even as its network strategy becomes clear, Akasa's product strategy is taking a hit.

The airline in a communique on November 15 talked about the issues facing the supply chain and how it is dealing with it. The airline which was slated to induct two planes each month has not been able to do that in October and is unlikely to do it in November as well. However, the airline said that it still expects to have 18 aircraft in its fleet until the end of March, which means it would have to induct 11 aircraft till then.

Also Read: Akasa Air adds Pune to its network, Bengaluru to get more flights from Nov 23

The airline has a differentiated product with few planes but now it is inducting aircraft which will have first three rows with 2x2 seating instead of 3x3. These aircraft would not have the purple seat covers and all seats may not have USB chargers — something which the airline talked about with pride as a differentiator during its launch. All of these aircraft were destined for full-service carriers which had two classes configured, with some for Jet Airways — headed by Vinay Dube back then.

Facing operational complexities

The airline is not going to sell these 2x2 seating at additional prices but is also not offering any priority in terms of check-in or differential service. These are stop-gap arrangements with the aircraft to be reconfigured at a later date when the supply chain issues are likely to get over. From engines to seats, the global supply chain is in a disarray but no specific end is in sight.

For a young airline, this creates complexities. The core of LCC operations is fleet commonality for simplified operations. This involves the ability to swap aircraft and crew to ensure that operations are smooth, on-time and hassle-free. In addition, one type of aircraft and seats and just about every component ensures that the airline has to have lesser inventory with itself.

But the current state of the airline would mean that it could face two challenges. The first would be the ability to freely swap planes. A difference of 15 seats is a lot and it will have to dedicate aircraft to certain routes and not sell just as many seats.

In an event where an aircraft with 189 seats is grounded, a replacement aircraft with lesser seats may not be a blanket solution since the loads could be full. This also has an impact on inventory management where the engineering team would need to maintain inventory and parts for multiple seat types, unlike standardised seating, which could have a problem in near future.

But commercial strategy becomes clearer
Even as the product challenge comes to the fore, the airline is all set to be the third-largest in terms of frequencies from Bengaluru. The airline had surprised many by selecting Bengaluru as its hub. By its known schedule, it will be basing seven of its eight aircraft in Bengaluru and one in Mumbai, its corporate HQ.

From August to November, the airline has climbed the departure count at Bengaluru, effectively overtaking SpiceJet, Air India and Go FIRST and within touching distance of Vistara — which it will overtake with the next induction when it increases flights to Mumbai and launches flights to Pune.

While Bengaluru, like most other airports, is heavily dominated by IndiGo with over 50 per cent of all domestic departures and seats, the Akasa Air strategy seems to aim at occupying the number two spot at an airport which has availability of slots, a new terminal opening up for commercial operations easing passenger pain and the second carrier by capacity AirAsia India now busy with integration with Air India Express.

Akasa Air’s network — so far from Bengaluru — sees the airline taking on the IndiGo and AirAsia India duopoly on Bengaluru-Chennai and Bengaluru-Kochi routes. Likewise, it has more frequencies than everyone except IndiGo by end of the year on the Bengaluru-Mumbai route. Its next destination Vizag has been another old destination for AirAsia India.

Tail note
It is unclear if Boeing is compensating the airline for the delay in delivery or the issues with seats. It is also unclear if the airline was aware about this when the orders were placed or the product was unveiled.

As the commercial strategy becomes clear, it increases the risk of getting hit by competition — except that competition itself is struggling with supply chain issues with IndiGo and Go FIRST having to ground aircraft due to engine issues. Overall, the country is seeing lesser flights due to one or the other reason — leading to a delay in recovery to pre-COVID numbers.