Yesterday, India’s newest airline in the making, Akasa Air, received its first Boeing 737 MAX aircraft at Delhi Airport. On occasion, some members of the Akasa team of over 250 people at the moment flew into Delhi to receive the first aircraft. This was an internal event, so we received a great picture from Akasa after.
Akasa Air’s Founder, MD & CEO, Vinay Dube, also invited us to their training centre in Gurugram for a brief chat. He won’t hand us out his playbook, but he shared some details about what the future holds for Akasa Air. Off the bat, he is very bullish on the India growth story over the following decades, and he circles back to the fact that he wants, along with his team, to build an airline for the long-term. He believes in the role that aviation will play in the economic growth and says this is the same pitch he gave to his investors, colleagues, and anyone else he tried to get on board.
Akasa’s Timelines to Launch
Vinay started by telling us the timeline of establishing Akasa Air. He mentioned that the airline has been dealing in paper, and then people, for the past one and a half years, and now they finally have a plane. Akasa will also receive its second 737-8 aircraft within the next month.
The airline aspirant will now use this aircraft to invite the DGCA, India’s aviation regulator, to proving flights. Akasa would have to fly about ten hours of proving flights over various days per a schedule set by the aviation regulator and demonstrate their capabilities to respond to multiple scenarios set out by the regulator on board.
Akasa expects to receive their Air Operators Permit in the next couple of weeks, subject to everything falling in place for them. From there, they need to apply for slots formally and receive them from the airports (Informally, there are already some agreements in place, but a formal process goes through only after any airline has received their AOP). From there, depending on what slots they receive, they hope to put their tickets up for sale and launch by the end of July 2022.
Induction schedule of aircraft induction
Akasa Air will start commercial activities with two aircraft in July 2022. From there, every month between August 2022 to March 2023, Akasa expects to have two 737-8 jets delivered, making it a total of 18 aircraft in their fleet by March 2023. Over the subsequent four years, Akasa will have the rest of their 54 aircraft delivered, taking them up to 72 aircraft by March 2027. All of these 737-8 aircraft will have 189 seats.
Akasa’s 737-8-200 aircraft start joining the fleet from the next financial year, after April 2023. I made the simple mistake of referring to the 737-8-200s as the denser variant, to which Vinay corrected me to mention they were higher capacity versions but not denser. He told me that the 737-8-200 aircraft would not compromise on the seat pitch for cramming in more seats on the plane.
We will, of course, need to see the seat pitch on the 737-8 to figure out how this works. It could be possible that slimline seats will make it work for the airline, but Akasa is not ready yet to do a product reveal of their 737-8. We will have to wait for that.
Akasa’s Cost Structure
Vinay Dube repeatedly claimed that Akasa would have a competitive cost structure. And I’d like to believe him on that. Ideally, there should be no legacy costs in terms of distribution or contracts for the airline, with it being a start-up airline at the moment. Additionally, one has to factor in the cost of getting new aircraft in, which will be hopefully lower for Akasa, given they are Boeing’s only MAX customer in India for now, and also took up some of their Not Taken Up aircraft. (SpiceJet has not picked up any new aircraft since the MAX’s ungrounding and has not yet returned its entire fleet of inducted MAX aircraft to the skies. Some SpiceJet NTU Aircraft have been since given to Southwest Airlines.)
Akasa’s network plans
Again, no dice getting much out of Akasa at this moment, but Akasa reminded us that the primary mission of the airline is to fly from Metro airports to tier-two and tier-three cities. However, which cities will turn up first will purely depend on what slots will come to them in the initial days. Also, Akasa expects their route network to evolve pretty quickly given they want to raise their fleet to 18 aircraft within the first year of operation itself.
On the international front, Akasa does intend to enter the space when they have complied with the rules that need an Indian airline to have 20 aircraft in the fleet to enter international operations, which should ideally happen in 2023 itself. However, a question on the intended routes brought together a whole bunch of airports where the 737-8 could fly with a full payload. Some of the interesting places Vinay Dube mentioned included Nairobi, Indonesia and the works.
Akasa’s Staffing Plans
As I mentioned earlier, Akasa already has about 250+ employees on board at the end of May 2022, and the airline intends to ramp up fast, going all the way to about 2000 employees by the end of this financial year 2022-23. One of the other things Mr Dube mentioned to us was that he was hoping to share the wealth creation process as well, which is why the company has a liberal ESOP programme as well, which is not limited to the founder or the co-founders, but to a large swathe of employees inside the company.
The choice of operating as a No-Frills Carrier
I questioned Akasa Founder Vinay Dube about his choice of the business model, given he spent most of his aviation career at legacy carriers in the US such as American and Delta, before heading back to India and joining as the CEO of Jet Airways. He also served as the CEO of Go Air for a while. He said it felt like the right business model for India, and there was no debate about it inside the company even at the concept stage.
Bottomline
Akasa Air has been working in the background for over one and a half years, and now, they are almost ready to launch operations. The next steps from here should be their Air Operators Permit, which is one of the last regulatory requirements to be cleared, and from there, they will open for bookings sometime during early July 2022. Flights are expected to take off during July 2022 itself.
What do you think of Akasa’s plans as they stand?
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