- To boost growth, Akasa Air plans to order a significant number of aircraft in the next 75 days.
- With a strong cash position and positive financial results in its first year, Akasa Air aims to expand its fleet to 76 aircraft by mid-2027 and begin international services by the end of fiscal 2023.
- While an initial public offering (IPO) is imminent, Akasa Air’s CEO believes it is unlikely to happen before the end of the decade as the airline needs to first strengthen its position in the Indian market.
India is one of the fastest growing aviation markets in the world. While flag carrier Air India is undergoing a significant restructuring process, low-cost carriers are taking advantage of the strong demand for air travel that has characterized this market over the past few years. One of the newest airlines, Akasa Air, is one of India’s newest airlines, reflecting the country’s booming aviation industry, with plans for a massive triple-digit aircraft order and an upcoming initial public offering.
Akasa Air plans to significantly expand its fleet
Akasa Air started operations just 14 months ago. However, based on the positive results, the carrier’s management is confident that demand will continue to grow. As a result, Akasa Air has announced a massive triple-digit order for the aircraft within the next 75 days.
Rumor has it that the airline plans to raise $400 million. Nevertheless, Akasa Air co-founder and CEO Vinay Dube stated that the airline has sufficient funds to place an order for the aircraft by the end of 2023. Akasa Air already has a corresponding order book for 56 Boeing 737 MAX aircraft – four Boeing 737-8 and 52. Boeing 737-8-200s.
Photo: Akasa Air
According to Dube, the Indian carrier generated cash in its first 14 months of operations. As a result, the strong cash position will enable Akasa Air to place a significant order for the aircraft without having to seek another external source of financing.
Akasa Air’s future prospects
Akasa Air’s maiden flight took place on August 7, 2022. One year and two months later, the airline has gained significant market share in India.
Akasa Air currently operates over 750 flights per week covering a network of 16 domestic destinations, including major Indian hubs such as Mumbai, Bengaluru and Delhi. By the end of fiscal year 2023, the airline hopes to begin international service. The carrier has already received international rights to fly to Riyadh, Jeddah, Doha and Kuwait.
Photo: Yatrik Sheth | Shutterstock
To maintain its growth plans, Akasa Air intends to operate a fleet of 76 aircraft by mid-2027. In the near term, the carrier expects to receive two additional Boeing aircraft by the end of this calendar year.
If all goes according to plans, Akasa Air will close the current financial year with 25 aircraft. Additionally, the carrier expects to almost double its fleet during the year, ending fiscal year 2024 with 40 aircraft.
An IPO is expected, but not before the end of the decade
A positive first year has already focused Akasa Air management’s attention on the possibility of an initial public offering (IPO) of the airline.
However, the stock exchange entry is not expected to take place before the end of the decade. According to the airline’s CEO, Akasa Air needs to continue to grow and position itself as a significant player in the Indian market, where it currently holds a 4.2% market share. According to Dube, it is unlikely that the airline will pursue an initial public offering in 2027, when the carrier plans to operate 76 aircraft.
Photo: Akasa Air
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Sources: Times of India; Financial express
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