Akasa Air hits a milestone. But are there reasons to celebrate?
Aug 14, 2024
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Explore the fascinating journey of Akasa Air and its key milestones, including impressive revenue growth and fleet expansion. Discover the challenges the airline faces as it navigates financial losses and a heavy reliance on Boeing. Delve into what it takes for Akasa Air to soar higher in a competitive market—it's a blend of achievements and hurdles that might just determine its future success!
Akasa Air achieved remarkable growth by increasing its revenue and fleet size significantly, outpacing even established competitors like Indigo.
Despite early success, Akasa faces substantial financial hurdles and operational challenges, including significant losses and delays in aircraft deliveries.
Deep dives
Impressive Growth and Milestones
Akasa Air has demonstrated significant growth since its inception, achieving a remarkable 300% increase in revenue and available seat kilometers in FY24. The airline's rapid expansion includes the addition of 24 new aircraft to its fleet within just 21 months, surpassing established carriers like Indigo, which added 20 planes in a similar timeframe. Furthermore, Akasa's early venture into international flights—within 19 months—marks a historic achievement for Indian airlines, fueled by recent policy changes that allowed new carriers to operate internationally. Their strong on-time performance, with 77% of flights landing punctually, combined with not canceling any flights during a global IT outage, showcases their operational efficiency and sets them apart in a competitive market.
Challenges on the Path to Profitability
Despite Akasa's initial successes, the airline faces significant financial challenges, having accumulated losses of 2400 crore rupees in its first two years, a stark contrast to Indigo's 400 crore loss during theirs. Compounding these issues are delays in Boeing aircraft deliveries that hinder cash flow due to their sale and leaseback strategy, relying on selling newly acquired jets for immediate funding. Additionally, there is a concern over passenger hesitancy towards flying on Boeing 737 MAX planes, potentially impacting demand amidst competing airlines offering alternatives. With a surplus of 800 pilots and ongoing financial burdens, Akasa's journey to profitability is fraught with turbulence, raising questions about its future trajectory in the aviation landscape.