Akasa Air has carried 17 million passengers since inception, of which close to 10 million came in the last one year. Aircraft delays, however, have slowed down the airline. Co-founder and chief commercial officer Praveen Iyer tells Swaraj Baggonkar that the carrier, which is almost three years’ old now, isn’t too worried about Boeing’s delay in deliveries.
How has business disruption between India and Pakistan impacted you?
It is temporary. It does affect travel and it has seen some softness in bookings. With some of the cancellation because of airports being shut, it is going to have an impact on the growth trajectory.
Should airlines seek compensation for rerouting of flight paths?
If we had flights from north India overflying Pakistan and into the Middle East (West Asia), we would have been part of the airline consortium to request for aid. Given the political situation, there is nothing wrong in what the carriers have done.
You inducted your 28th aircraft a few days ago. Is the fleet expansion moving as per plan?
Every aircraft addition to our fleet till the 30th increases our capacity by 3.33%. Till about March-April of 2023, we had 19 planes. We decided to take a breather and it was little longish, driven by constraints at Boeing. But that also helped us in consolidation and focus more on quality traffic leading to reworking of our network to a large extent.
How have you worked around this?
For instance, we are very strong in Uttar Pradesh. We are not concerned about the induction the way it has happened. It does not affect us much. We are happy with the trajectory and also happy with what’s coming for us based on the delivery that’s planned over several months. Our corporate partnerships have helped bring in good quality traffic.
How do you plan strategies when Boeing’s delivery schedules are far from getting back to normal?
In the first year we grew by 150% and in the second year we grew by 50%. And we will consistently see north of 35% growth every year. This (Boeing delays) does not affect us in any way. We are happy the way the business has progressed for us.
So, there is no question about Akasa revisiting the order of 150 aircraft to Boeing?
No way. At some stage revising upwards yes, but revising downwards, absolutely not. Revising upwards is not a question we face today. We have 226 on order and have 198 more to go. These orders are booked till 2032. There are aircraft available from both Airbus and Boeing starting 2030.
Will Akasa move beyond offering just the economy class?
I don’t see us moving away from our core identity. The corporates are finding our seats most comfortable and spacious. Our flyers find our food as having the widest variety. They find our on-time performance the best. We are happy with the product outlay and that is going to stay. We will stick to that and not go beyond that.
The number of pilots you have exceeds the requirement…
We have 800 pilots on our payroll and 75-80% have had some bit of line flying. The trajectory we wanted and what we have created does not match but we are still happy that we are on this side of the issue. The last thing one wants is that you have the planes but no pilots to fly them. But by the end of this year (December), we will start utilising all of them.
How has the international market worked for you?
We have Doha, Kuwait, Abu Dhabi, Riyadh and Jeddah and are adding more to that city as bilateral rights open up. Load factors are pretty good in these sectors. We could look at Thailand and Vietnam in the near future but again these depend on the rights.
How was FY25 financially?
This is a business of scale. Our margins are getting better with each passing financial year. They are going to be a lot better progressively because of the scale. It is important to build a structure that is sustainable and scalable.
How much of stake dilution happened during the recent funding round and how much was raised?
We cannot share those details right now. But we are happy to note that the investors believe in Akasa and the Indian growth story.
Is India’s aviation growth promise intact?
The passenger CAGR (compound annual growth rate) used to be 14% between 2006 and 2016. Between 2019 and 2024, it was 2.5-2% because of Covid-19 and challenges around aircraft availability. But over the next several years, this will be 7-8%, which means the CAGR between 2019 and 2035 is going to be 5-6%. This rings in the golden age for the industry.