Earlier this year, we reported about the up and coming new airline Akasa, with Vinay Dube at the helm. Since then, Rakesh Jhunjhunwala, the Indian big bull, picked up a 40% stake in the airline promoted by Vinay Dube, who was previously working with Delta, before heading to Jet Airways as CEO. His last assignment was with Go First (earlier GoAir), where he lasted only six months in 2020.
Akasa is intent on bringing the Ultra-Low-Cost Carrier Model to India as per current reports. I am not sure how this will work out for them, given the lack of secondary airports in India for now, and also the grey area in Indian flight rules where a certain minimum is expected to be offered to all passengers as a package rather than piecemeal.
Akasa planning to induct Boeing 737 MAX Aircraft
Given the aggressive timelines of Akasa, which earlier intended to start operations by early 2022, the airline needed to earn early slots for their aircraft. Per various accounts, the airline intended to induct between 70 to 100 aircraft within the first five years, to be a formidable force in Indian aviation. The airline was, hereby, considering inducting a fleet of Boeing 737 MAX aircraft. There are many reasons to do so.
Firstly, apart from SpiceJet, Vistara, Air India and Air India Express, Boeing does not have commercial airline customers in India, with only SpiceJet being a customer with a big outstanding order for now. All the other airlines have built their narrow body operations around the Airbus A320 family (including Go First, Vistara, IndiGo, AirAsia India and Air India).
The Boeing 737 MAX is clearly of no interest to SpiceJet for now, who might be using the pandemic as an opportunity to stay away from their big order. Even the ones delivered to them (13) have not come back in the skies two months after the 737 MAX grounding was lifted, because of apparent issues between the lessors and Spicejet.
As a consequence, Akasa’s big order may be welcomed by Boeing, both in terms of pricing discounts they may be willing to offer, as well as regulatory support that may be extended. The Indian market has evolved, and Sale and Leaseback Transactions are more common now than when IndiGo made its business plans and implemented them rigidly.
Now, Bloomberg is reporting that a deal is near and that Boeing may receive an order for 70-80 aircraft. The deal might be announced at the Dubai Airshow, which is next week and usually big on order flow.
The Akasa airline has started to prepare for an imminent launch and has already informed the regulator that it intends to bring in Boeing 737 MAX aircraft in its fleet. That should be good news for Boeing, who otherwise had largely seen only wide-body customers in India.
What do you think of Akasa’s fleet plans with the 737 MAX?
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