Akasa Air, the newest airline in India, is to place a triple-digit aircraft order by the end of 2023, the airline Founder and Chief Executive Officer, Vinay Dube announced on Twitter on Wednesday. He also announced that the airline will be hiring 300 pilots in the next 12 months.
Akasa operates a Boeing MAX fleet, having ordered 72 MAX 8s and -8200s at the Dubai Airshow in November 2021 with the entire fleet being delivered in five years. The airline has now taken delivery of eighteen of them, with two more to join in due course. Boeing’s undelivered backlog shows 52 aircraft to be delivered. Akasa did cancel a number of aircraft on direct order and sourced them from lessors instead, like Griffin, Pembroke, Avolon, and BBAM.
While Vinay Dube was silent on the number of aircraft that the airline will order, Satyendra Pandey, Managing Partner of aviation services firm, AT-TV, is of the view that it “is likely that the order will be to the tune of 160 – 180 aircraft.”
Pandey points out that Akasa’s initial order for 72 aircraft was placed quite judiciously. “They have been aggressive with the induction of the orders which is a reflection of their ambition as well as market growth. To continue the growth additional capacity will be required and the second aircraft order will do just that,” he said. Pandey pointed out that within six months of launch, the airline has captured a three percent market share and it will almost certainly launch international operations this year.
Network now includes fourteen cities
Akasa launched operations in August last year and since then it has carried over a million passengers. It operates over 600 weekly flights connecting fourteen cities including Bengaluru, Kochi, Chennai, Mumbai, Delhi, Goa, Hyderabad, and Varanasi.
“Their operations and growth are a reflection of a team that understands aviation and also strong initial capitalization – two aspects that are missed by many startups. That said, the competitive intensity in the market cannot be underestimated. With one competitor at 55 percent of the market and a second one at thirty percent, Akasa will find itself fighting for each seat, for every dollar, and for establishing itself as a carrier of choice for the segments it is targeting,” says Pandey. While Pandey does not name the airlines, IndiGo has an over fifty percent domestic market share while Air India aims to get to thirty percent, having ended January at 9.2 percent.
The startup team at Akasa includes Praveen Iyer, Co-Founder, and Chief Commercial Officer, Belson Coutinho, Co-Founder and Chief Marketing & Experience Officer, and Dube all of whom were with Jet Airways which temporarily suspended operations in April 2019.
CAPA predicts a surge in orders
Dube’s announcement comes after CAPA India, a specialist aviation advisory and research practice, said on February 9 that Indian carriers are expected to place orders for between 1.500 to 1.700 aircraft over the next 24 plus months. The report added that as of now the Indian market is highly underpenetrated with a total commercial fleet of around 700 aircraft, which is smaller than some of the world’s individual largest airlines. “Given the immense potential that exists, it stands to reason that there is a need to induct more aircraft,” the report says.
The report (which came out before Air India’s 470 aircraft mega order) states that India has about 800 aircraft on order of which IndiGo accounts for 500. The report further states that almost every carrier in India is expected to order more aircraft in the next couple of years for fleet replacement as well as growth.
(Additonal reporting by Richard Schuurman)