Rakesh Jhunjhunwala announced that they will possibly launch their Akasa in 2022. Perhaps in the warmth of the following year.
The Akasa project is operating as a low-cost carrier or an ultra-low-cost Carrier expects to initiate services.
Jhunjhunwala the Mumbai-based investor will invest $35 million and is planning to maintain a fleet of planes, Over the next four years.
What is Akasa?
SNV Aviation will soon be launching Akasa Air. The Akasa brand is a low-cost airline. To operate the Akasa project, Jhunjhunwala has an onboard flying industry veteran, former Jet Airways CEO Vinay Dube and ex-IndiGo president Aditya Ghosh. Dube and Ghosh will be the co-founders of the company.
Jhunjhunwala has received the no-objection certificate from the ministry of civil aviation.
Proposals to deliver flying across India will begin in 2022 said the airlines.
Yet, it needs an Air Operating Permit (AOP) from the aviation regulator DGCA, to hand out the permission once it gets satisfied with all the aspects of operations and safety.
Dube in his statement stated, “Akasa airline will serve all Indian cultural backgrounds.”
However, there is no success in running a low-cost airline.
Still, the company has taken the courage to play against established companies like IndiGo and SpiceJet in the low-cost carrier (LCC) space.
Rakesh Jhunjhunwala recently met Prime Minister Narendra Modi.
The airline announces that it has already completed the hiring of its top management. The corporate team of affairs has already been appointed, including Ankur Goel, former head of IndiGo’s treasury and investor relations, as its Chief Financial Officer, and Neelu Khatri.
According to the report, Akasa Air seems to have a tough time maintaining costs given the fact that crude oil accounts for nearly 40% of an airline’s operating cost, and is at an over four-year high.
Also, low-cost airlines such as AirAsia India, which started operations in June 2014. It has not seen a break-even year yet, and AirAsia Bhd is no longer investing funds into the airline.
After the pandemic, the situation was terrible for the aviation sector, which has huge fixed costs and needs a fixed regular cash inflow to sustain operations.
The Tata group now occupies 84% of AirAsia India and will soon acquire a 100% stake in the company. Except for IndiGo, which was profitable till the outbreak of the Covid-19 pandemic, no other low-cost airline in India has yet succeeded as an LCC.
Jet Airways, was the family of Akasa’s CEO Vinay Dube and other team members of Akasa, which was established in April 2019. The airline was unable to service its debt for huge operating costs and low pricing power with the presence of no-frill carriers like IndiGo, which controls half of the aviation market in India.
So the opportunities are likewise won by the newly formed airline.
Yet, the airline has an excellent balance between cost and quality so that it can gain a victory on the customers while keeping costs low, which is essential to remain sustainable for an airline in the longer term.
Likewise, the coming year will be one of the most exciting times. Indian aviation in recent times will go with Air India. Also, the AI Express will then be flying as Tata Group airlines.
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