Corner Office Conversation with Akasa’s Vinay Dube & Praveen Iyer
Aug 16, 2024
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Vinay Dube, a leader in the aviation industry, and Praveen Iyer, an influential figure at Akasa Air, dive into the remarkable journey of their airline. They discuss Akasa's rapid fleet expansion and their commitment to customer service. The duo reflects on overcoming challenges during a tech outage and utilizing AI to enhance the customer experience. They share insights on strategic route planning, lessons learned from swift growth, and the competitive landscape with major players like IndiGo and Air India in sight.
Akasa Airlines has rapidly expanded its operations by implementing innovative features and maintaining perfect operational performance despite industry challenges.
The airline is focusing on technology investments and a cost-efficient structure to enhance customer experience and achieve long-term profitability.
Deep dives
Impressive Growth and Milestones
Akasa Airlines achieved significant growth in its first two years, becoming the fastest airline to reach 20 aircraft and launch international flights while also being the first to implement features like pet travel and quiet flights. Despite some operational turbulence, including pilot disputes and security glitches, the airline successfully maintained its performance, exemplified by not canceling any flights during a global tech outage. The commitment to rigorous planning and execution has been instrumental in this progress, underscoring their approach to turning bold ideas into reality. As the airline moves forward, it aims to add more aircraft to continue its growth trajectory beyond utilization.
Challenges and Financial Management
Akasa faces substantial challenges, particularly with Boeing, which has experienced delays in deliveries of its 737 MAX planes due to ongoing production issues. These setbacks have impacted the airline's capacity growth and financial performance, resulting in reported losses while trying to expand its fleet. However, Akasa's strong financial foundation allows it to manage these hurdles without external funding, as it has not utilized any of the investment funds received to cover operational losses. The airline's current strategy focuses on achieving the lowest cost structure in India to pave the way for future profitability.
Technology and Future Aspirations
Akasa is heavily investing in technology and artificial intelligence to enhance customer experience, including developing a multilingual app for passengers and freight forwarders. The airline's approach involves leveraging consumer data to improve operations, personalization, and efficiency. Looking ahead, Akasa aims to continuously innovate and maintain a consumer-focused strategy, thereby setting it apart from competitors. The management expresses confidence in achieving long-term profitability and intends to delay an IPO until the airline has a more robust financial history, estimating a more realistic timeline for listing in 2028.
Akasa Air, one of India's youngest carriers, has had a fairly good run so far. The two-year old airline was the fastest in India to start international operations and the fastest to scale up its fleet. It now operates more than 900 weekly flights to India and international locations, has a 4.7% domestic market share and 226 planes on order.
But piling losses, ruthless competition from the IndiGo-Air India duopoly and a slowdown in deliveries from troubled plane maker Boeing loomed large and threatened to impact its run.
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