The Dream from Heaven: Akasa Airlines
The aviation realm requires every business to create and maintain a unique set of competitive advantages. Think of it as crafting a special key that unlocks their success in the sky.Following this theory, Akasa has created some history in the Indian aviation business, which has been dubbed a "graveyard of airlines" since so many have risen and subsequently fallen in a matter of years. But Akasa stayed.
What is the strategy of Akasa to stay in the aviation industry? Why did Rakesh Jhunjhunwala (The Big Bull) invest in Akasa, knowing that aviation is mostly a loss-making industry?
The Indian airline industry's financial challenges and losses history can be attributed to various factors. Some of the common reasons are -Intense competition, price sensitivity, operating cost, and most importantly, Covid has affected a lot to the industry. India's airline industry only incurred a loss of 19,594 Cr. in 2020-21.
Rakesh Jhunjhunwala invested $35 million in Akasa Airlines during the Covid period. His vision was to expand the company to 70 aircraft in four years. He wanted to develop an ultra-low-cost carrier, which can be known as the Dmart of the Aviation Industry. He said, "Ryanair, an ultra-low cost carry, Europe was profitable from day one and similar business plans for Akasa." Ryanair offers the cheapest flights in Europe. The business strategies of Indigo and Ryanair are similar. In India, we already have an airline that provides ultra-low-cost carriers with good service. So, what is the difference between Akasa and Indigo?
It's not always about airlines, but airline makers play a significant role, too. Akasa, being started in COVID, had given considerable orders to Boeing in the period. In 2018, two Boeing aircraft crashed in 5 months, which caused a lot of trust issues. Because of this news and COVID-19, Boeing suffered losses when Akasa placed orders with them. This helped Akasa in cost-cutting to a considerable extent.ssssIt is the only airline in the 120-year history of global aviation to grow from zero to 20 aircraft in one year. Its market share has climbed from 0.2 percent in August of last year to 4.8% in May of this year.Akasa is overgrowing. But Indigo also places huge orders with Airbus and has the same level of benefits with Airbus as Akasa has with Boeing.
However, Akasa entered the business when the airline industry was almost dying; the Covid Period gave them an edge of less competition. As competitors of Akasa are sitting on a pile of debt, Akasa got the cheap aircraft at a maximum discount of 50%. Akasa has the upper hand on Indigo as the mastermind of Indigo, Mr. Aditya Ghosh, has joined Akasa Airlines. Mr. Aditya Ghosh was the one who brought Indigo to this high height, and he, being with Akasa, rotates the table at 360 degrees.
Akasa is also planning to expand the business to foreign waters. And the Indian government is also taking steps to grow the aviation industry. The Indian government has started a scheme known as "UDAN," which means "Ude Desh Ka Aam Nagrik," which aims to make air travel more affordable for the general public. There will be a subsidized rate of tickets by the government, which will be better for Customers and airlines. This Scheme is part of the National Civil Aviation Policy (NCAP).
With all the changes in the aviation market, let's see what is next for India's youngest airline "AKASA."
About the author,
Brhamjot Kaur
A girl who loves to learn, read, and write. Who lives in two worlds; one is the fictional world and the other one is real world. Worked as a freelancer for content and slogan writing. An introvert in general, and extrovert with some. A girl who is fighting for her own fairytale.
