We expect to place large aircraft order before year end: Akasa Air | The Financial Express

We expect to place large aircraft order before year end: Akasa Air

Akasa Air is a well-capitalised with the financial means to induct 72 aircraft over the next five years.

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' Our meal delivery process has been enhanced to ensure seamless delivery and customer delight.'

Low-cost carrier Akasa Air, which started its operations six months ago, exited December with a market share of 2.3% and is now aiming for more. Vinay Dube, founder and CEO, told FE’s Swaraj Baggonkar that the company is expecting to place an aircraft order that is substantially larger to support its expansion plans. Edited excerpts:

What changes have you brought in the six months of operations?

We have made a number of enhancements. We have added new options to our signature onboard menu — Café Akasa — based on the feedback we have received. Our meal delivery process has been enhanced to ensure seamless delivery and customer delight. We have had an unprecedented scale up in just 200 days with 14 aircraft in operations, flying to 13 destinations and will clock 100 daily flights before mid-March 2023. We have also focused on making operational decisions that are yielding results like having some of the lowest cancellation rates in the industry and top tier on-time performance.

What is the fleet presently? You have placed orders for 72 Boeing 737 Max. When will these be fully inducted?

We have a firm order of 72 Boeing MAX aircraft to be delivered over a five-year time period. We have recently announced the arrival of our 16th aircraft. One aircraft will be added to the fleet every 15 days, taking the fleet size to 18 by the end of FY23. Before the end of this year, we expect to place an aircraft order that is substantially larger, in order to adequately service our fast-evolving network expansion plans.

Based on the government’s air travel growth projections, will the planes that are on order be sufficient to meet demand?

Few people have, historically, flown in India compared to most of the West. All of that is changing and we want to be part of that change. According to MoCA, India is projected to have 400 million air travellers on domestic and international routes by 2027 and will breach the 500-million mark by 2030. During this period, the number of airplanes in India will double from the current 700 to 1,500-2000 by 2030, thus marking the massive potential that this sector holds.

Has the airline fulfilled the initial targets you had set?

There is perhaps no airline in the history of aviation that has had the kind of growth trajectory that Akasa Air has already put into play. We have been progressively scaling up our operations. We have carried over 1 million passengers within six months from the start of our operations. In December 2022, we crossed the milestone of over 500 weekly flights and announced a total of 20 routes.

How many routes have been added so far?

We are improving accessibility to air travel by establishing a strong national presence and providing linkages from metro to tier 2 and 3 cities. We recently launched operations from Hyderabad, our 13th domestic destination.

What areas do you believe the airline needs to improve on?

We should not get complacent about the successes we have had. There’s a tremendous opportunity and a need in a very transactional environment to create something inclusive for our customers. We are focusing on how we take the feedback that we get in its true sense and spirit and reach back to the customer to provide the right solution.

Airline business is capital-intensive with heavy chances of making losses. What is your outlook for profit generation?

I don’t think aviation has any more chances of making losses than any other business. There are examples of carriers to know that it can be a cash-generating business if it is run well. As an example, my former carrier in the US remained profitable for the 10 consecutive years preceding Covid – and for some years, in the billions. My view is, if done correctly, airlines can have a sustained level of profitability.

Your market share, as per the DGCA, hit almost 2% in November. What is the target you have set internally?

Our goal is to create a long-term healthy, durable business. We care more about running a good business for our employees, customers and shareholders than a particular market share target. Akasa will focus on customers and employees and a by-product of these would be the market share and other financial metrics to be the most trusted airline in the world. Our goal in the aviation industry is not to be the largest player, but the most trusted airline in the world.

At just under 80%, Akasa’s passenger load factor is lower than the industry average as of November. How do you plan to improve that?

After the first month of our operations, the PLF has been at an average of 80% from September to November, which is an incredible feat. The expectations from Akasa Air are high and I’m happy that we have delivered so far. As the network expands, more and more people try us, and we continue to roll out newer products and services, we will naturally expand our loads.

Are you looking at funding opportunities? 

Akasa Air is a well-capitalised with the financial means to induct 72 aircraft over the next five years.

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First published on: 09-02-2023 at 03:40 IST