Jhunjhunwala-backed Akasa Air signs $9 bn deal for 72 Boeing 737 Max planes

Akasa Air, the Indian low-cost airline backed by billionaire investor Rakesh Jhunjhunwala, has placed an order for 72 Boeing 737 MAX aircraft. The order, valued at $9 billion at list prices, was signed at the Dubai Air Show on Tuesday. Typically, airlines secure big discounts from the original equipment manufacturers while placing orders.

Akasa Air’s order includes two variants from the 737 MAX family, including the 737-8 and the high-capacity 737-8-200. The 737 MAX was cleared for operations by the Indian civil aviation regulator in August after a two-year ban.

While the joint announcement did not give the details, sources indicated that the airline may start receiving its aircraft from April 2022. As per its initial plans, Akasa Air will induct 20 aircraft in a year and is likely to have bases in Bengaluru and Delhi.

The order is a shot in the arm for the US planemaker and would help it narrow the gap with Airbus, which has over 80 per cent share in India’s narrow-body fleet. Airbus received an order for over 550 A320neo from IndiGo alone and its delivery pipeline for the narrow-body aircraft is full until 2024.

"India is one of the fastest-growing aviation markets in the world with unparalleled potential. Akasa Air's core purpose is to help power India's growth engine and democratise air travel by creating an inclusive environment for all Indians regardless of their socio-economic or cultural backgrounds,” airline’s Chief Executive Officer (CEO) Vinay Dube said.

The airline received no objection certificate from the civil aviation ministry last month.  

“The 737 MAX, with its optimised performance, flexibility and capability, is the perfect airplane to establish Akasa Air in the Indian market and ensure it effectively grows its network,” said Stan Deal, Boeing Commercial Airplanes president and CEO.

“Providing the lowest seat-mile costs for a single-aisle airplane as well as high dispatch reliability and an enhanced passenger experience, the 737 MAX will ensure Akasa Air has a competitive edge in its dynamic home market,” said Boeing.

“Akasa Air’s order for Boeing is very significant and gets them back in the narrow-body market in India. Post Covid-19 pandemic we see the OEMs focusing on stronger and long term players,” said Kapil Kaul, South Asia CEO of aviation consultancy CAPA.