Akasa Air faces uphill task of expansion

Jhunjhunwala then roped in former President of IndiGo Aditya Ghosh for the airline, and the leadership team was formed. Billionaire investor Jhunjhunwala backed the airline with over 40% shareholding, and the airline operated its first flight from Mumbai to Ahmedabad on 7 August.

Analysts said the first month for Akasa has been a mixed bag in terms of the airline’s momentum and customer feedback. The sudden and unfortunate demise of Jhunjhunwala on 14 August was a severe blow to the young airline within a week of its operations.

“The backing of Jhunjhunwala was a big positive factor for Akasa Air. Although the airline was new, one could see Akasa directly competing with the largest player in the industry, primarily with the support of Jhunjhunwala. He was also a key factor when it came to any funding strategy for the airline. His absence certainly leaves a void for Akasa,” an industry expert said.

Over the past month, the airline has expanded its fleet, with the fifth aircraft set to join Akasa soon. The airline has opted for the narrow-body fleet of Boeing 737 MAX aircraft with a total order book of 72 planes, of which 18 are to join within the current financial year. So far, the airline has expanded its network largely in the southern country. Akasa currently connects Mumbai, Ahmedabad, Kochi, Chennai, and Bengaluru. As the airline aims to add around two aircraft per month, it may look at connectivity around Delhi in the next phase of network expansion, analysts said.

While the expansion will help in revenue generation, the airline faces an uphill road in terms of yield. The discontinuation of fare caps has opened the sky for a fare war, which is set to largely benefit the customer but will hurt airlines financially. This is evident from a recent fare war when Akasa Air was selling Mumbai-Ahmedabad flights for around ₹1,400, and Go First further offered the same flight for around ₹1,000. The fares on this route are generally around ₹4,000-5,000.

In addition to the bloodbath in fares, the airline also suffered a technical glitch which exposed the personal information such as name, gender, email address and phone numbers of some passengers to “unauthorized individuals.” The passenger feedback has also been mixed in terms of the meals at the airline and the ticket booking experience.

“The airline has made a mark when it comes to the in-flight experience as there is a freshness in terms of seat colours, charging points and better leg space. Hopefully, it should be able to deliver in terms of profitability and brand awareness in due course,” another industry expert said.

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