Akasa Air Set to Plan IPO, Targets Profitability by 2028
One of the newest airlines in India, Akasa Air, plans to go public as part of its long-term expansion strategy. The airline, which started flying in 2022, has ambitious goals to grow and become a significant force in the highly competitive Indian aviation industry. “Going public is clearly a milestone for Akasa Air,” Dube stated. “The company aims to be profitable by 2028, and listing on the stock exchange is a natural step in our growth journey.”
The launch of Akasa Air was facilitated by the COVID-19 pandemic. CEO Vinay Dube admitted that he would not have considered starting the airline if not for the unique opportunities created by the pandemic. The drop in aircraft leasing prices and the availability of skilled pilots, cabin crew, and engineers allowed Akasa to quickly assemble a fleet of 24 aircraft in just two years. Dube declared, “The pandemic was the only time I would have started an airline.” Having the proper aircraft at the right price and in the right quantity was crucial, as these account for over 70% of an airline’s costs.
In its first two years, Akasa has gained attention with its new aircraft and popular in-flight menu. However, the airline has faced challenges, including losses exceeding ₹2,400 crore. These losses are primarily due to the lack of profitable metro routes and rising costs from hiring pilots who cannot be utilized due to delays in Boeing’s aircraft production. Despite these challenges, Dube remains positive. He sees the losses as part of the process of building a strong foundation for the future. Importantly, the initial investment of ₹250 crore from the family of the late stockbroker Rakesh Jhunjhunwala is still intact. “Initial business losses are common for startups. However, we have expanded our fleet, hired 4,000 new employees, secured significant agreements, invested in technology, and preserved our initial investment,” Dube said.
By 2028, Akasa hopes to become profitable and go public. Co-founder Belson Coutinho emphasized the airline’s focus on using technology to understand customer preferences and offer personalized services to build loyalty. Chief Commercial Officer Praveen Iyer noted that Akasa’s strategy of focusing on underserved destinations like Dehradun and Srinagar has been profitable, and international routes are also performing well. The airline is also working to increase its aircraft utilization, which is now over 13 hours a day. Akasa Air’s journey has had its ups and downs, but with a clear plan and strategic investments, the airline is determined to achieve profitability and become a major player in the aviation industry.
Vinay Dube further added that all startups experience financial losses initially. However, Akasa has secured two aircraft deals and long-term vendor agreements, achieved a fleet of 25 aircraft, hired 4,000 people, and invested in technology. Recently, a group of family offices, reportedly led by Azim Premji of Wipro and Ranjan Pai of Manipal Group, are in discussions to invest around $125 million.
The image added is for representation purposes only
