Akasa looks to undercut IndiGo as battle for cheapest airfares heats up

A week ahead of its maiden flight, airline is offering 10% lower fares on Mumbai-Ahmedabad route

With less than a week to go before the first Boeing 737 MAX of stock broker Rakesh Jhunjhunwala’s airline venture Akasa takes to the skies, it seems to have straight away taken on the big guns of low-cost flying. On August 7, the first Akasa flight will take off from Mumbai and land 80 minutes later at Ahmedabad.

When Akasa opened its bookings on July 22, its tickets were priced almost on a par with other low-cost airlines like IndiGo and GoFirst flying between the two cities. As flight booking algorithms tend to price tickets cheaper beyond a 10-day window, IndiGo finally has a competitor that is offering more affordable flights.

A look at airline and travel aggregator pricing data shows that for August 17, 10 days after its maiden flight, Akasa’s Mumbai-Ahmedabad flight ticket is priced at Rs 3,000, 10 per cent cheaper than IndiGo and GoFirst.

IndiGo has the largest domestic share in India, commanding 56 per cent of the market, and is known for providing the cheapest flights on most of the routes it plies. IndiGo’s cheapest offering on this route is for a ‘red-eye flight’ — post-midnight departure.

On August 12, Akasa plans to start its Kochi-Bengaluru operations. On August 19, Akasa will launch flights connecting Mumbai and Bengaluru. Its fares are among the lowest on both these sectors. Till recently, the cheapest fares on these sectors were dominated by IndiGo or on occasions by AirAsia India. Akasa, like these airlines, has launched as a no-frills carrier, unlike Vistara and Air India, which are full-service airlines with higher fares on the same routes.

At the time of throwing bookings open, Vinay Dube, the airline’s chief executive officer, had talked of launching a “product unlike anything experienced in the category thus far with a reliable and dependable network and affordable fares”.

An aviation analyst with a leading consultancy said, “Global oil prices are showing signs of softening and aviation turbine fuel (ATF) prices were reduced by two per cent over the weekend. If the downward trend in ATF prices continues, airlines would have more leeway to reduce fares amidst rising competition in the domestic market. That should be good news for passengers who have had to shell out unusually high fares over the last year.”

While Akasa is matching IndiGo and others like SpiceJet on airfares, it is still banking on highly priced add-ons like extra baggage charges, cancellation fees, and pre-booked food to bring in additional revenues.

Most low-cost airlines doubled the cost of their on-board food service after flying picked up pace in 2021 — in-flight catering remained suspended for a considerable period of time in 2020-21. The so-called ‘gourmet menus’ of all airlines now price their food around Rs 500 or more, depending on the food on offer. Jhunjhunwala’s airline has also priced other services like seat selection and priority boarding at rates matching those of IndiGo and other cheap airlines.