Akasa Air, India’s youngest airline, is well-capitalized and plans to add 5-10 new destinations, including international routes, next year as it aims to maintain its position as the country’s fastest-growing airline, CEO Vinay Dube said.
Dube, in an interaction with PTI, also projected an "incredibly bright" outlook for the next 30 years and said the delay in the delivery of one or two aircraft does not change the fundamentals of the airline's business or growth trajectory as it has built an extremely "strong and stable" platform.
The nearly two-and-a-half-year-old Rakesh Jhunjhunwala family-backed Akasa Air currently has a fleet of 27 Boeing 737 Max planes and commanded a 4.6 per cent market share in CY2024.
"It is no secret that Boeing has been delayed in its delivery stream. No secret about that, either from us or Boeing or any other airline whether one or two aircraft were late or not, is not something that changes the fundamentals of our business. It does not change the growth trajectory," Dube said in response to a question on aircraft deliveries.
However, he said that Akasa has stopped giving guidance on deliveries because "the story changes focus from Akasa being the fastest growing airline in India or the world, to two aircraft were late." Akasa Air currently has 199 aircraft on order from a total order of 226 placed in three tranches of 72, 4 and 150 aircraft between November 2021 and January 2024.
All these aircraft as per schedule are to be delivered to the airline by 2032.
While between June-December 2022, the airline inducted 14 planes in the fleet and another 8 in 2023, the number of deliveries came down drastically to just 4 planes last year, owing to supply-chain issues.
Stating that the airline is satisfied with where it stands currently, with almost a 300 per cent growth in 2022-23 and 2023-24, he said, "the outlook for the future is incredibly bright. For the next 30 years, I think we live in a country that has this amazing economic growth engine that underpins everything that India does." "Going forward, we continue to expect a very robust degree of growth... We hope to add 5-10 new destinations, a combination of domestic and international destinations next year," he said.
But an airline does not add 5-10 international destinations or plan (it) unless it is expecting a sizable number of aircraft, he said.
Akasa Air chief also said that the airline is well on track, if not ahead, of its financial plans as far as a path to profitability is concerned but did not share any timeline as to when the airline was expecting to be profitable.
"So, we're pleased with where we are financially. We have also said that we have been and will continue to be a well-capitalized company," he said in response to a question on the airline's funding plans amid reports of the airline having talks with a clutch of investors such as the family offices of billionaires Azim Premji and Ranjan Pai for a USD 120-million capital infusion.
"Private companies raising funds or not raising funds or doing deals or not doing, are just things that at least we cannot talk about one way or the other. We can just talk philosophically and philosophically we will always remain well-capitalised," he said.
Dubey, however, added, "We have never either confirmed or denied any deal." He said that the airline is there (in the market) for the long run and emphasised that it was not going to make two common mistakes- undercapitalised and uncompetitive cost structure- which some of the airlines made in the past among others.
According to him, 60 per cent of the airline's pilots have started clocking flying hours and the remaining cockpit crew and the vast majority of the remaining ones will also start flying by the end of the year adding, "It is only dependent on our delivery stream of aircraft." "But when we talk about the vast majority of these pilots starting to clock flying hours by the end of the year, we're doing this based on realistic expectations of aircraft delivery that we have received from Boeing," he added.
In response to a question on the 10 show-cause notices by the DGCA to the airline in the last couple of months, he emphasised that Akasa Air continues to take every element of safety with the same level and degree of seriousness as a world-class airline would.
"Somehow the notices that we get seem to make it into the public eye. So I'd say notices are not alien to airlines. Having said that, we take each notice extremely seriously because we have a professional regulator. There are very specific things that the regulator tells us. And we look at those specific things and make changes as appropriate. And then we look at adjacent spaces," Dube said.
"And when they direct us to do something, we have to take it very seriously. We have to make the appropriate changes, not just for that one notice, but we have to look at adjacent spaces as we make these changes.
That's what good organisations do," he said.
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