Why 2022 Will Be India’s Aviation Startup Year

Launching an airline during a pandemic wouldn’t be the first choice for many. Yet, that’s exactly what’s happening in India, with 2022 set to welcome not one but two carriers into the market. One of them – Akasa Air – is backed by a seasoned investor and other industry experts; the other – Jet Airways – is looking to replicate its former glory days under new leadership. How will these two airlines fare in the tricky Indian market, and what will it mean for Indian aviation?

Akasa Air

Launched by former CEO of Jet Airways and GoFirst, Vinay Dube, Akasa Air gained crucial financial backing from billionaire Rakesh Jhunjhunwala. The ace investor will hold a 40% stake in the airline after pumping in $35 million. Former IndiGo chief Aditya Ghosh will also be a stakeholder in the company and serve as a board member.

The airline seems bullish in its approach by hiring experienced industry executives in top management positions, including former IndiGo treasury head Ankur Goel as its Chief Commercial Officer. It crossed its first hurdle after receiving an NOC from Indian aviation authorities in August and is currently in talks with Boeing for a potential order of 70 Boeing 737 MAX aircraft.

However, it won’t exactly be an easy road for Akasa, given the ruthless Indian market. LCCs such as IndiGo and SpiceJet are expected to put up a tough fight to retain market shares, airport slots, and key routes. Akasa could also learn from the mistakes of failed carriers like Kingfisher and former Jet Airways to not fall for the debt trap and execute carefully thought-out expansion plans. The airline’s position as an ultra-low-cost carrier (ULCC) will probably set it apart from the rest, but we’ll have to wait and see if that translates into profits.

Jet Airways 2.0

In contrast to Akasa, Jet Airways’ second outing will be like its former self – a premium full-service carrier. However, it will be a slightly different airline this time around. For starters, it is now owned by the Kalrock-Jalan consortium. It will be a much smaller carrier in the beginning with around 25 aircraft, of which 18-20 would be narrowbodies. Jet 2.0 will also be headquartered in the Delhi NCR region instead of former Jet’s corporate base in Mumbai.

Launching a full-service carrier at a time when other such airlines like Vistara and Air India are in the red doesn’t exactly seem like a good idea. However, co-owner Murari Lal Jalan is hoping to rely on the carrier’s legacy with some changes in the present version. In an interview with the Economic Times, he said,

“We would like to continue with the same legacy that Jet Airways used to have. In fact, we would like to bring in a youthful flavour with a lot of internet and other things on the air apart from the old legacy we will definitely continue with the premium airline and what it used to be.”

Churn in the Indian skies

We’re witnessing something exciting unfolding in the Indian aviation space. Even though COVID has brought the industry to its knees, aviation in India is seeing new entrants and rigorous restructuring and investment in other carriers.

Air India will soon have new owners who plan to steer it in a new direction. We’ve also seen GoFirst rebrand itself to keep itself alive in the competition. Vistara is also on track with its international expansion to the US once it receives more Dreamliners. The entry of Jet Airways and Akasa will only add to the dynamics of the sector.

It’ll be interesting to see if Jet Airways will be able to break into a tough market successfully with its full-service ambitions. Akasa’s ULCC model will also be keenly observed. Depending hugely on ancillary revenues and extreme unbundling of fares is something the Indian market is not much used to. Perhaps, Akasa will prove to be an industry disruptor in that sense.

Source: https://simpleflying.com/india-startup-year-2022/