Akasa May Be Trying To Grow 'Too Fast Too Soon'
Pilot resignations, dipping market share and tough competition are enough to keep any management on its toes.
On Aug. 7, 2022, when Akasa Air’s first commercial flight took off from Mumbai to Ahmedabad, few would have bet that it will become the fastest airline in global aviation to reach a fleet of 20 aircraft within a year.
Days after it celebrated its one-year anniversary, with international services lined up for rollout, reports said 10% of the airline’s pilots quit without serving notice periods of over six-months, forcing the company to stop operations on several routes and reduce the frequency on many others.
The airline, which counts employee-centricity as one of its three major strategies, sued the pilots, and went on to surprise Indian aviation watchers by reportedly claiming in the Delhi High Court that it may shut down due to the fiasco.
But in October, the airline claimed in a press release that it’s “squarely back in growth mode”, thanks to its “advanced pilot planning and training programs”.
However, it admitted that it had to “rationalise”, or trim, its network after “a small set of pilots abandoned their duties”.
“We have rationalised our network to ensure that we offer our customers the highest levels of operational reliability, as we did for the first 11 months of our operation,” the airline said.
Despite this, the airline's market share is stuck at 4.2% for the past four months, after it fell from a peak of 5.2% in July. Till July, the carrier's market share had gained consistently month-on-month, since its inception nearly a year ago.
Perhaps, the late ace investor Rakesh Jhunjhunwala-backed airline felt flyers consistently rewarded it for the reliable service, which was disrupted by the sudden exit of over 40 pilots.
The budget carrier’s market share fell in August and is still stuck there since, as per the latest data from the Directorate General of Civil Aviation.
Now, a one-year old Akasa Air, that flew past the 18-year old SpiceJet in both June and July in terms of market share, is sitting below the cash-strapped airline for the past four months.
The airline might be relying on other metrics to measure its growth, but the market share gains have stalled.
“The cascading impact of several pilots suddenly leaving still seems to be creating difficulties for the airline,” said Mark Martin, founder and chief executive officer at aviation consulting firm Martin Consulting.
Akasa Air didn’t respond to NDTV Profit's email queries.
The airline aims to have a fleet of 76 aircraft by 2027, with another 100 expected to be ordered soon, and sees itself on track to be one of the world’s largest airlines by the turn of this decade.
It has added over 3,000 employees to its payroll and aims to end current fiscal with over 3,500.
In a market littered with dead airlines, with Go First’s grounding being the most recent, Akasa Air may find its hands forced to tend to more immediate concerns, such as the sudden exit of pilots, instead of growing at an accelerated pace.
The razor thin margins, an extremely price-sensitive market, a heavy dependence on the volatile aviation fuel prices and competition from giants like InterGlobe Aviation Ltd.'s IndiGo and Tata Group-airlines are enough to keep any management team on its toes.
“Akasa Air is trying to grow too fast, too soon,” said Martin. “It needs to figure out a ground level strategy first, to ensure all teams are working in unison.”
