Redefining Air Travel - Case Study on Akasa Air by Rakesh Jhunjhunwala

India's aviation industry has embraced a new wave in airline travel as India’s Warren Buffet, Rakesh Jhunjhunwala has finally launched an Ultra-Low-Cost Carrier, Akasa Air.

The aviation industry in India is in fact an untapped market with only a few companies making all of the profit. It also has to be read along with the multiple events where companies like Kingfisher and Jet Airways had to suspend their operations as they run on a loss.

The pandemic has not spared this industry as air travel is still struggling to make an actual comeback out of the larger travel restrictions that were imposed on it.

Companies like Indigo, which is India's largest airline, have already confirmed that their losses have been wider than they expected. This is despite the quick reinstatement of the operating services across India as soon as the restrictions were lifted.

The fact that the industry is an unexplored arena and yet a very risky platform makes the new initiative of Mr. Jhunjhunwala more unpredictable and yet attractive. It cannot be denied that this investment is going to alter the airline industry for good. This article will analyse all sides of this ambitious plan.

The Plan of Rakesh Jhunjhunwala
Will Air Travel Become Economical?
Better Air Carriers
Concerns about Akasa Air
The Present State and Growth of Akasa Air
How to Book Akasa Air Flights?
Akasa Air - Logo, Symbol, and Tagline
Akasa Air - Future Plans

The Plan of Rakesh Jhunjhunwala

The successful investor Rakesh Jhunjhunwala has clarified his plans on investing $35 million in Akasa airlines where he would own 40% of carriers, which means 70 aircraft within a span of four years. After he invested $35 mn on Akasa, the airline company was quick to receive the no objection certificate (NOC) from the Ministry of Civil Aviation of India in October 2021.

The Akasa airline company, "Akasa Air", is designed to serve as an ultra-low-cost carrier that is led by a very enviable team that one could imagine. It includes former CEOs of successful airline companies like Indigo, Delta airlines et cetera.

The current leadership team of Akasa has Vinay Dube, who was the ex-CEO of Jet Airways and Go First as the Founder, CEO, and MD of the company. Praveen Iyer, the former GoFirst Chief Commercial Officer (CCO), and GoFirst Head of Flight Operations, Nikhil Ved, are some others who are leading the Mumbai-headquartered, low-cost Indian airline company.

Their focus will be more on air carriers that can accommodate 180 passengers. In the face of exclusive expensive fare wars and the high cost of maintenance and operations, Rakesh Jhunjhunwala's initiatives will be a game-changer.

If materialised properly Akasa Air could be the golden feather in the fastest-growing aviation market in the world.

Will Air Travel Become Economical?

Rakesh Jhunjhunwala with his confident proposal has made it clear that his intention is to capture the mass market. The ULCC or ultra-low-cost carrier will democratise the hitherto expensive transportation method.

The initiatives by earlier companies like Air Deccan have significantly helped in bringing down the ticket fares of aeroplanes. It is expected that Akasa Air’s initiatives will further bring down the prices.

This will also align with the UDAN scheme of the Government of India, which aims to make air travel well-furnished, available, and affordable. However, it will heavily depend upon the slots that they will get in airports.

The fact that even vendors and lessors are also in a very battered state after the pandemic, will enable the airline company to renegotiate its terms and costs so as to raise fresh funds and trim costs, which will in turn, help them to afford lower ticket fares.

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Better Air Carriers

Akasa Air will alter the market of plane makers into a very competitive sector as the industry is trying to wriggle out of the burdening losses that it had to incur as the pandemic struck them hard.

It is anticipated that there will be heavy competition between plane makers like Boeing and Airbus. As far as Boeing is concerned, it is indeed a valuable opportunity for them to make a comeback to the Indian industry since the only operator for their 737 aircraft in India is SpiceJet.

As per the statistics, Indian carriers own more than 900 planes of which more than 700 are owned by Airbus and only 100 by Boeing. The latter is also losing its position in the wide-body aircraft market as well. This means that the plane makers will be ready to give competitive rates if Akasha wants to lease an aircraft from them.

These rates are expected to be better than the pre-Covid rates, according to Nithin Sarin who is a managing partner at a law firm that functions as an advisory to airlines and lessors. Such a competition is highly beneficial as far as the air travellers are concerned since it will assure them quality travelling at affordable prices.

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Concerns about Akasa Air

The vision of Rakesh Jhunjhunwala through Akasa Air, will be a hard nut to crack. Out of all the industries it can be said without any doubt that the aviation industry is one of the riskiest and most unpredictable markets.

Lack of The First Comers Benefit

In India, 50% of the low-cost air carrier market is held by just one player – Indigo. When a new airline with an ambitious mission like Akasa is entering the market, it not only has to compete with the wide network of Indigo but also its potential.

Akasa should calculate the ways in which Indigo can scale up its game as they attempt to do the same. At least, initially, it will be very difficult for Akasa Air to get attractive time slots in important metro airports like Delhi, Mumbai, Bangalore, etc., which will have a direct impact on its revenue.

The Contrast between High Cost and Low Price

One of the trademarks of Akasa Air, as proposed by Jhunjhunwala, is its low ticket fare. However, the reason why air travel is expensive is widely known. During the pandemic, turbine fuel charges have further increased along with other Covid related uncertainties.

The ground handling charges and labour costs also constitute a large part of the operational cost of an airline. The former holds 75% of the whole non-fixed cost that an airline operation should incur.

Amidst other expenses like airport fees, taxes, luggage et cetera the aim to democratise airline travel might cost a fortune for Akasa Air. Here, high cost is contrasted with low price, which if handled carelessly can even lead to the failure of the entire endeavour.

Rising Competition

Apart from the first-comer advantage that it lacks, the timeline of its entry into the airline industry is also marked by the rise of other companies who had lost their strategic position in between.

Along with Jhunjhunwala, the Kalrock Capital-Murari Lal Jalan consortium is all set to revive Jet Airways which had suspended its operation earlier. They have also got approval from the National Company Law Tribunal as well.

At the same time, Air India is also likely to find a buyer which will further alter the nature of competition in the sector itself. GoAir can also be an important competitor if it successfully gains investor interest during its listing.

The Present State and Growth of Akasa Air

Akasa Air has finally commenced its commercial operations. The airline company has last announced that it will be starting its flights from August, 7, 2022, onwards, which it did on the mentioned date. In its first flight Akasa Air flew from Mumbai to Ahmedabad after it received the Boeing 737 MAX aircraft.

Akasa Air witnessed an inaugural ceremony conducted at the Chhatrapati Shivaji Maharaj International Airport in Mumbai, where the Co-founder of the airline company Vinay Dubey gave a speech. Besides, Rakesh Jhunjhunwala joined the other passengers onboard in the maiden flight of the company. The passengers of Akasa Air, elated as they were on the first flight, shared numerous photos and videos of the iconic Akasa Air flight.

Akasa Air has also disclosed that it will offer 28 weekly flights between Mumbai and Ahmedabad.

Akasa Air has already revealed the destinations and has started bookings for the same as well. Some of the destinations along with their starting dates are:

The company got its Air Operator Certificate (AOC) from DGCA after it completed the proving flights that were required to be done, on July 7, 2022. Akasa Air started taking flight bookings on its website on July 22, 2022.

Akasa Air Crew Members' Dress

The Akasa Air dresses for the crew members are designed keeping in mind the all-around comfort of the airline's crew. Akasa Air is the first Indian airline that introduced customer trousers and jackets.

The clothes of Akasa Air were specially made for the airline service provider. The fabric of the jackets and the trousers are weaved out of recycled polyester fabric, made from pet plastic bottles salvaged from marine waste. The uniforms are stretchable.

Beauty and comfort were kept in mind while designing these clothes. Rajesh Pratap Singh designed the uniform of Akasa Air. Akasa Air uniforms have combined soft colour combos that include black, white, and blue for the pilots, and orange and black for the crew, which ooze class and comfort. The sneakers that the crew members will sport are designed by Vanilla Moon. These shoes will be light and are lined with an extra wall of cushion from heel to toe. The sneakers are made out of recycled rubber and don't use plastic in any way.

How to Book Akasa Air Flights?

If you are wondering how to book Akasa Air flights, then booking your seat in the next Akasa Air flight is a cakewalk. Here are some simple steps you need to follow to do it successfully:

• First, you need to visit the Akasa Air website and log in to your account through the mobile app of the airline operator using your mobile number.
• Then, you need to add the details of your travel which would include whether it is a one-way or a round trip and more. After entering these details, you would get all the information about the flights and their fares.
• Next, you would have the option to enter add-ons including your favourite meals and more.
• Then, update your passenger information
• In the last step, you need to choose your preferred payment option to complete the process.

Akasa Air - Logo, Symbol, and Tagline

Akasa Air chose "Sunrise Orange" and "Passionate Purple" for its branding, which reflects warmth and energy. The company announced its symbol and tagline on December 22, 2021, and mentioned that they were inspired by the elements of the sky.

The airline, which is operated by SNV Aviation and backed by billionaire Rakesh Jhunjhunwala, mentioned that the symbol, which resembles ‘The Rising A’, reflects "the warmth of the rising sun, the effortless flight of a bird, and the dependability of an aircraft wing".

The logo of Akasa Air and its tagline helps in "translating our purpose to serve every traveller with an innovative yet simple alternative required a modern and confident symbol", said Vinay Dube, Founder, MD, and CEO of Akasa Air.

"It's Your Sky", says the Akasa Air Tagline.

The brand symbol and tagline of Akasa were weaved in by 26FIVE India Lab, which is a brand engagement firm headquartered in Mumbai, Maharastra.

Akasa Air - Future Plans

Akasa Air has planned to have 18 aircraft by the end of 2022, as confirmed by Vinay Dube, the CEO, Founder, and MD of the airline company. Furthermore, it looks to add 12-14 aircrafts per year. Within the next 5 years, Akasa Air is planning to possess nearly 72 aircraft, added Dube.

Dube further announced that Akasa Air will initially have services from metro cities to tier-2 and tier-3 cities, and will also operate flights to major cities across India.

Conclusion

Even with its risks and unpredictability, the foundation set by Rakesh Jhunjhunwala through Akasa Air is revolutionary without any doubt. The changes it can bring to air travel by democratising prices can be phenomenal.

They have a very efficient and talented team to fall back on, which further increases the probability of a successful materialisation of their idea. There is absolutely no doubt about the anxiety that the loss of Kingfisher Airlines, Jet Airways, and SpiceJet brings to the table.

However, it will be rather interesting to learn the ways in which Akasa Air with heavy support from a brilliant investor like Rakesh Jhunjhunwala will make his dream of ULCC come true for the good of all!

FAQs

What is Akasa airline?

Akasa airline company, Akasa Air, belongs to SNV Aviation Private Limited, and is an airline company, headquartered in Mumbai, Maharashtra, and is created to serve as an Indian low-cost airline service operator.

Who is the founder of the Akasa airline company, Akasa Air?

Akasa Air is an ultra-low-cost carrier backed by Rakesh Jhunjhunwala.

Who are the competitors of Akasa Air?

Jet Airways, Air India, and Indigo are some of the competitors of Akasa Air.

When will the Akasa Air flights commence?

The flights of Akasa Air are expected to start on August 7, 2022, and will begin to be operational between the Mumbai-Ahmedabad route.

What is the Rakesh Jhunjhunwala airlines company called?

The Rakesh Jhunjhunwala airlines company is named Akasa Air.

What are the Akasa Air destinations?

Akasa Air is expected to operate in the Indian states of Gujarat, Karnataka, Kerala, and Maharashtra.