Akasa Air's whirlwind takeoff: How airline is gradually inching its way up

It's partly benefited from SpiceJet and GoAir's problems, but with a 20th aircraft to be inducted soon, the 11-month-old airline is eyeing international destinations too

Last week, when the Directorate General of Civil Aviation (DGCA) released the monthly statistics, it became clear that Akasa Air had beaten the established budget carrier SpiceJet for the first time in terms of domestic passengers carried per month.

Akasa Air carried 618,000 passengers in June, compared to SpiceJet, which carried 555,000 passengers. Additionally, Akasa Air recorded a 4.9 per cent domestic market share in June to SpiceJet's 4.4 per cent. This was a significant achievement for an airline that operated its first commercial flight just 11 months ago.

Akasa Air has gradually been inching its way up at a time when two other Indian budget carriers -- Go First and SpiceJet -- are facing severe turbulence. Go First suspended all flights from May 3 onwards and filed for insolvency. Cash-strapped SpiceJet has been curtailing its domestic flights for the last many months, following which it announced last week that its promoter, Ajay Singh, would infuse Rs500 crore.

"Go First's exit and SpiceJet's degrowth have definitely helped Akasa, but there weren't many routes where it was competing directly with these two. Yet the freed-up slots by these helped Akasa get some peak-time slots, which drive both passenger numbers and growth," Ameya Joshi, an aviation analyst, and founder of the aviation blog "Network Thoughts," told the newspaper.

Akasa Air has a fleet of 19 B737 Max from Boeing and operates 912 flights per week, connecting 16 cities in India, according to aviation analytics firm Cirium.

The 20th plane will be added to its fleet this month. "It is a tremendous achievement to be the only airline in the world in the history of aviation from zero to 20 aircraft in less than a year and has frankly exceeded all our expectations," Akasa Air's co-founder and chief commercial officer Praveen Iyer told Business Standard in an interview.

In India, an airline with 20 planes can start international flights after getting the requisite government clearance. Iyer said the airline plans to start operating international flights by the end of this year. What will be the airline's first international destination? "The options are anywhere in the Gulf and South-east Asia. It is too early to mention any specific destination," he replied.

The top seven busiest stations for Akasa are Mumbai, Bengaluru, Goa, Delhi, Ahmedabad, Hyderabad, and Pune, according to Cirium's data. Joshi said that Akasa Air has spread considerably with 19 planes. "It has made changes to its network since the early days, which could be due to a mix of profitability and opportunity to add flights at slot-constrained airports," he added.

Akasa Air's top five busiest routes are Bengaluru-Mumbai, Mumbai-Ahmedabad, Mumbai-Goa, Bengaluru-Pune, and Delhi-Mumbai, wherein the carrier is operating about 114, 56, 56, 54, and 42 flights, respectively. The airlines recently added flights on the Mumbai-Kolkata route.

According to Iyer, connectivity is being built not just on metro-to-non-metro routes but also on metro-to-metro flying as well, so that you get the optimum blend of the network mix that is so critical for any enterprise.

"There is a combination of source and destination markets. Our network is built with an even balance between leisure, VFR (visiting friends and relatives), and corporate traffic in mind," he said.

By March 2024, the company will have 26-27 planes in its fleet out of the 76 Max aircraft it has ordered. Joshi said Akasa will have to look at volume-driven metro routes in due course of time. "While they have mentioned their intention to be focused on tier 2, there is a higher seasonal variation on tier 2 routes than on metro-to-metro. A metro-to-metro route also ensures higher business traffic, which drives year-round revenue," he added.

Akasa Air has also been in the top position of the on-time performance (OTP) charts for the last four months. "Focus on OTP is built around some core ideologies that we follow as an enterprise. We are an extremely cost-conscious, customer-centric, and employee-centric organisation. The moment you build your airline, or any enterprise, with these fundamentals, you will see that things fall into place," Iyer said.

"It is not about having a small fleet or a large fleet. It is about doing it right," he added. The airline, which has about 3,000 employees right now, plans to add about 700 more employees by the end of this financial year.

"We will get more and more people who will drive this whole process across the organisation. And that has been the core behind what we have managed to achieve with these numbers like OTPs and market shares. I think the people of the organisation have made all the difference," he noted.

SpiceJet operates about 1,149 flights per week, 47 per cent fewer than in July 2022, according to Cirium. Go First’s resolution professional has invited Expression of Interest (EoI) for the carrier’s sale by August 9 this year as a part of the ongoing insolvency process.

Was Akasa's growth assisted by the fact that Go First has suspended flights and SpiceJet has significantly curtailed its operations? Iyer replied: "As far as we are concerned, we are focusing on ourselves. We don't want to focus on anything else."

"In fact, a year back, we talked about inducting 20 planes within the first year of operations, and we did exactly that. Our focus would be really on what we can do, how we can expand, and how we can continue to grow the domestic market," he added.

In the coming months and years, however, Akasa will definitely need all the focus it has to compete with two giants -- IndiGo and Air India Group -- which have placed the world's largest aircraft orders to boost flight operations in the growing Indian market.