Akasa Air to place large plane order in 2023, eyes international growth

The new order will be for narrowbody planes, said Akasa's co-founder, a former chief executive of now-grounded, bankrupt full-service carrier Jet Airways

By Aditi Shah

NEW DELHI (Reuters) - India's Akasa Air will place a "substantially" large order for new narrowbody jets this year, as the start-up budget airline looks to capitalise on booming demand at home and begin international flights, its chief executive told Reuters.

The 200-day-old airline has taken delivery of 17 Boeing (BA.N) 737 MAX planes out of a total order of 72 jets to be delivered by March 2027.

"Before the end of this year we are going to place another aircraft order that is going to be substantially larger than the 72 aircraft order we have placed," Vinay Dube said during an interview without giving a specific number.

The new order will be for narrowbody planes, said Akasa's founder, a former chief executive of now-grounded, bankrupt full-service carrier Jet Airways (JET.NS).

Dube did not say whether the order would go to Boeing or Airbus (AIR.PA), but budget carriers typically prefer to use a single narrowbody type to help control costs.

The order plans come as travel demand in India has seen a sharp rebound post COVID-19, making it the world's fastest-growing aviation market, with capacity surpassing 2019 levels and passenger numbers inching close.

Air India on Tuesday placed an order for 470 jets, the largest by a single airline, as it looks to revamp its ageing fleet to capitalise on the travel boom at home while also competing with Gulf rivals like Emirates for international passenger traffic.

Indian airlines are forecast to order 1,500 to 1,700 planes over the next couple of years, according to consultancy CAPA India, including a likely 500 plane order from Akasa rival IndiGo (INGL.NS), the country's biggest airline.

Akasa will add three planes to its fleet within the next three months to reach 20, making it eligible to fly to international destinations as per Indian government rules, Dube said.

"By the end of the year, we hope to be flying internationally," he added, with the carrier targeting destinations within the range of a 737 MAX in South Asia, Southeast Asia and the Middle East.

Dube said in the domestic market, Akasa would focus on its strategy of connecting smaller cities with the country's major metros at a time when demand remains strong despite high ticket prices.

"Everything is growing gangbusters," he said. "The demand in India as a whole is going to continue to grow and grow and grow."

 

(Reporting by Aditi Shah; Editing by Jamie Freed)