Akasa Air is India’s newest national airline, launched on August 7, 2022. The airline currently has a market share of 4.7% (as of July 2024) in the domestic airline space and operates 24 737 MAX aircraft. The airline made its first aircraft order at the Dubai Airshow 2021 for 72 Boeing 737 -8 and -8-200 aircraft and later added four more aircraft to make it 76 on order. In January 2024, the airline disclosed another 150 737 MAX aircraft orders.

Akasa’s Aircraft Delivery Dry Spell

For a while, Akasa was the fastest airline to scale up. The airline was offered, and it collected over 20 aircraft designated for other airlines and assembled to their specifications. However, the pandemic and the 737 MAX crashes earlier prevented these aircraft from being taken up because either the airlines wound up or they cancelled orders. In the case of China, there was also an inordinate delay in the approvals for the 737 MAX to be delivered to Chinese airlines, which also caused Boeing to put these on the market and get new customers for the aircraft.

Akasa’s speed of aircraft induction, however, has been inconsistent. Take a look at the quarterly dispersion since deliveries started:

• April – June 2022: 1 Aircraft
• July – September 2022: 5 Aircraft
• October – December 2022: 8 Aircraft
• January – March 2023: 5 Aircraft
• April – June 2023: 0 Aircraft
• July – September 2023: 1 Aircraft
• October – December 2023: 2 Aircraft
• January – March 2024: 2 Aircraft
• April – June 2024: 0 Aircraft

There have been reasons for this, out of Akasa’s Control. Boeing this year, since the blowout of the door on Alaska Airlines 1282, operated on January 5, 2024, has been in the middle of intense scrutiny from the US Government about the practices followed at the Renton plant, where the 737 aircraft are assembled. Within a few days, the US Regulators put a cap on Boeing to assemble no more than 38 737 MAX aircraft a month until they were satisfied that the quality issues affecting Boeing were resolved.

Since then, Boeing has resolved many quality issues, an effort it showcased to LiveFromALounge and 40 other aviation media houses worldwide in June 2024. They also initiated a buyout of Spirit Aero, an aerostructures manufacturer that was earlier part of Boeing and is responsible for assembling the main fuselage. Boeing also appointed a new CEO.

Basically, Akasa’s deliveries were hemmed because Boeing could not build and deliver the aircraft fast enough. With an impending machinist strike (which will hopefully be cancelled), this would have become the next big issue for Boeing to be unable to deliver aircraft to its customers. The struggle of Boeing’s suppliers, such as those who handle interiors (seats), in supplying enough parts is the story for another day.

The airline now has two brand new aircraft ready to be inducted into its fleet, to be registered as VT-YBB and VT-YBC. These are 197-seater all-economy configured aircraft, built for Akasa to their own specs, unlike the earlier ones which were white tails, and Akasa took them, and is now responsible to reconfigure these aircraft to their own specifications.  However, work on these has been slow. For instance, for the preparation of VT-YBB for delivery, here is the spacing in the test flights, which is quite the gap:

• Test Flight 1: Jun 12, 2024
• Test Flight 2: Jun 26, 2024
• Test Flight 3: July 30, 2024
• Test Flight 4: August 21, 2024
• Test Flight 5: August 29, 2024

Unfortunately, for airlines in India, the money generated by selling these aircraft on delivery to a leasing company and leasing it back (commonly called SLB) is a vital part of their cash flow.

Akasa starts to receive aircraft.

Akasa’s dry spell of aircraft delivery is over. One of the two aircraft, VT-YBB, has already left Washington’s BFI airport and is en route to Reykjavik for the first leg of the delivery flight. It should be here in India by the end of the week (the aircraft will fly from Reykjavik to Larnaca and then to Hyderabad, and the crew has to build in rest time on these flights.

The second aircraft, VT-YBC, is expected also to start its ride to India later this week. One more aircraft is being produced on the Renton site.

Bottomline

Akasa’s aircraft induction dry spell is over, with the 25th aircraft for the airline being flown to India. The airline will also see the 26th aircraft delivery later this month. From here on, if Boeing sorts its speed on aircraft delivery, Akasa should be able to expand quickly again. Until then, they have to depend on the airline to increase the uptime of their existing aircraft to generate growth.

What do you make of Akasa’s growth plans?

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