Why startup airline Akasa will be a formidable force in Indian skies

Akasa Air, founded by the aviation industry veteran Vinay Dube, will be a serious player in the sector as it is backed by maverick stock investor and billionaire Rakesh Jhunjhunwala and another aviation stalwart Aditya Ghosh who was earlier the President of IndiGo

India's newest airline Akasa Air (SNV Aviation Private Ltd), to be born shortly will further strengthen the country's air infrastructure/connectivity and will aid the growth of Indian economy. This comes seven and half years after the birth of Vistara and around 16 years after IndiGo took to the skies.

Akasa Air, founded by the aviation industry veteran Vinay Dube, will be a serious player in the sector as it is backed by maverick stock investor and billionaire Rakesh Jhunjhunwala and another aviation stalwart Aditya Ghosh who was earlier the President of IndiGo.

Ghosh who had spearheaded the rapid growth of IndiGo has come on board as an investor as well as a member of Akasa Air's management team. His experience, I believe, will be handy in building Akasa Air as a robust, full proof airline.

This startup airline, conceived during the Covid-19 period, has the perfect recipe to emerge as a formidable force as it has promised to provide affordable air fares as well as a robust network in the country. There is no doubt about the capability of the people who have founded and will run this airline. The initial $35 million funding and patient capital likely to be provided by Jhunjhunwala will help Akasa Air to navigate through the strong headwinds that aviation business is known to face.

From Mumbai, the foreign educated Dube started his career in American Airlines and had worked in Delta Air Lines before taking up CEO jobs at full-service airline Jet Airways and low cost carrier Go Air (Go First) which helped in honing his skills to effectively work in the challenging Indian environment.

The soft-spoken man with an American accent seems to be determined to pull it through this time and the stars seem to be on his favour. He has assembled a capable team to ensure that Akasa Air makes its mark and the team runs a sustainable operation.

Airline business is risky and not many owners make profit. We have seen the fall of several airlines including Jet Airways, Kingfisher Airlines, Sahara Airlines, Air Deccan in the past years. The later two were acquired by the former respectively and in the process they took the formidable carriers down.

IndiGo has been a runway success story and has a dominating presence over the Indian skies with over 53 per cent domestic market share. IndiGo's fairy tale success can be attributed to the meticulous planning by the US based co-founder Rakesh Gangwal, the former CEO of US Airways and precise execution by co-founder Rahul Bhatia who was aided by a brilliant lawyer-turned aviation executive Aditya Ghosh.

Now that Gangwal is on his way out and no longer involved in crafting the growth story of IndiGo, and Ghosh has moved on, Akasa Air has a strong chance to replicate the success of IndiGo or at least give it a tough competition in five to seven years. For now, it will be baby steps as Akasa Air will start flying operations with two aircraft by the end of this month. It has already procured one Boeing 737 MAX aircraft and is expected to have a total of 18 aircraft by the end of fiscal 2022-23.

Then every year it will add 12 to 14 aircraft and will have a fleet of 72 aircraft over 5 years. The number may be higher depending on the growth it may have. For Akasa Air, the runway is set for smooth take off.

Go First, the ultra-low-cost airline of the Wadia Group, is reportedly suffering from reliability issue as flights are often getting cancelled or clubbed at the last moment to cut down losses. The owners are believed to be against operating flights that do not make money.

SpiceJet, the 'red, hot, spicy' airline is reportedly saddled with financial crunch and maintenance issues. Civil aviation regulator, the DGCA had recently issued show cause notice to the airline on air safety lapses.

Jet Airways under the new owners is yet to take off. Unless it matches the service and operational standards of its earlier avatar, it will not regain its lost glory. The other formidable player the Tatas are yet to finalise their plans for their 4 airlines - Air Asia India, Vistara, Air India and Air India Express.

In all likelihood, Air Asia India will be integrated with Air India Express to make the combined entity a strong player in the low-cost space. What would happen to the full-service airline Vistara is not known. It is likely to be retained as a premium airline offering service to Europe and the neighbouring countries. The much stronger Air India brand will be revived to its past glory. Air India will continue to provide full-service flights in the domestic, medium haul and long-haul international sectors. The Tatas are in the process of bringing all the airlines under one company. Until that happens and the Tatas take position in the quest for dominance in the skies, Akasa Air has the chance to woo passengers and scale up through low fares and reliable service.

The trend of post Covid revenge travel and the high demand for flying has made airlines to charge more making it difficult for many people to afford the airfares. Akasa Air can be a force in the medium term to help bring down the fares by bridging the demand supply gap. It has a strong chance to play it as long as it believes that the sky embraces everyone so air travel should be inclusive and affordable to everyone.

(The author is a Mumbai-based senior journalist)