Akasa Air in the middle of crisis: How bad could the pilot shortage be?

With Indian aviation staring at a potential scramble for pilots, airlines such as Akasa can feel deflated

If a week is a long time in politics, six weeks can be an aeon in aviation.

On August 7, Akasa was celebrating its first anniversary and telling the world it had accumulated a fleet of 20 aircraft in record time and had overtaken SpiceJet in market share. On September 19, its lawyer said in the Delhi High Court the airline might have to stop operations unless its 43 pilots who had resigned served their notice periods.

The very next day, Akasa’s CEO, Vinay Dube (pictured), who is also one of its founders, said there was no chance of the airline’s shutting down. In a letter to employees, Dube said there were enough pilots at various phases of their training to fly more than 30 aircraft. In the short term, the airline will fly less and give up market share, but that was that.

Hands on the rudder

India’s airline market is in the throes of a shake-up. The Big Two, IndiGo and Air India, together lord over 80 per cent of the market. The Tata Group, which now owns Air India, also has Vistara and AirAsia in its fold.

For the rest, there are scraps. But even the scraps are not guaranteed. Go First is grounded and SpiceJet has been finding the going tough for some time.

This could have been a godsend for Akasa. With 20 planes in its fleet, out of 76 ordered, and another order for 100 planes being negotiated, it could have grabbed market share.

Naturally, a look at Dube’s letter to employees shows he is hurting.

“Some people have questioned whether it is employee-centric to seek legal remedy against former employees. Since these acts have caused disruption and disrespect to the great work done by our current employees, the most employee-centric thing we can do is to remain fiercely protective of your future and the promise we have made to our customers,” he says in the letter.

The notice periods — six months for co-pilots and a year for commanders — have a significant bearing on operations. “For a new or small airline, the notice period could ensure breathing space without which business can get impacted,” says Rohit Tomar, managing partner at Caladrius Aero, an aviation consulting firm.

Enforcing the notice period works in other ways. Analysts say it could deter other pilots — there are 400 in Akasa — toying with the idea of leaving for greener pastures in a hurry. It also makes rival airlines looking to poach from Akasa have second thoughts and factor in the delay caused by the notice periods.

Scramble on the cards
 

Air India and IndiGo have together ordered more than 1,100 new planes. Their delivery will start soon in small numbers, and big numbers will begin to arrive from 2025. With that, a scramble for pilots is inevitable, given that each plane requires 12 to 14 pilots for regular operations. Akasa would want to ensure it does not get squeezed by the Big Two.

An Akasa spokesperson declined to answer Business Standard’s queries. But analysts say the talk of closure, because 43 pilots choose to leave, is exaggerated.

“The leaving of 43 pilots in an airline with 20 planes is an issue. But will it bring them down on their knees? Of course not,” says aviation consultant Ameya Joshi.

So how bad could the pilot shortage be?

Industry estimates say 15,000 to 18,000 pilots will be required to fly the new planes arriving through the decade. That is nearly double the 9,000 pilots currently flying. 
 

To compound matters, many foreign carriers have begun to woo pilots from India. West Asian airlines, in particular, love Indian pilots for their familiarity with the language and culture.

In this scenario, if the number of commercial pilot licences issued by the Directorate General of Civil Aviation (DGCA), the aviation regulator, remains at the same level as in 2022, a year that saw 1,200 licences issued, there will be a substantial gap. To fill that gap, the infrastructure for creating more pilots — flying schools, instructors, and simulators — will have to increase substantially.

At present, commanders are more in shortage than first pilots. Some airlines have slowed the process of upgrading pilots, which requires tests and flying hours. Commanders earn four to five times more than first pilots, and the slower upgrade could be a way to keep salary budgets in check.
 

Exaggerated fears

Many airlines are not worried about a shortage of pilots. Some carriers, they say, are reducing their fleets or looking at shutting down. That frees up pilots. Secondly, every year a host of planes is de-registered and returned. So the net fleet addition is small — it was just two in 2022.

In 2024, as many as 150 to 170 planes are expected to be added. That is twice the number added in 2022. However, 80 planes are currently grounded.

Analysts say the exodus of pilots from Akasa is because Air India Express is getting up to 25 Boeing 737 Max planes from October this year, as China decided not to take the planes because of air travel slowing down. Akasa’s pilots fly the same aircraft.

Air India declined to comment on any of the issues.

Analysts say poaching is bound to happen. Akasa’s efforts to ensure its pilots do not leave at the drop of a hat is a way to avoid extreme disruption in its operations.
 

Akasa said in the high court last week that it cancelled more than 1,000 flights from August 1 to September 19 due to the abrupt resignations of its pilots, a rate of 20 per cent cancellations a month. However, the DGCA said that according to the details submitted by the airline, 1.17 per cent of its flights were cancelled in August.

The DGCA also told the court the rules of mandatory notice periods had been challenged in another case pending in the same court, “restraining the DGCA from taking any action against the parties”. It also said the parties (in an employment contract) “are free to fix their notice periods according to their mutual understanding” and the DGCA “has no role to play in it”. Undaunted, Akasa is setting its sights high.

“The Ministry of Civil Aviation has recognised the strength of Akasa Air’s operations and we have been designated as an international scheduled operator. This new designation will allow us to fly internationally, enabling us to take one step closer to our dream of launching international operations before the end of this year,” the airline said in a statement attributed to Dube. The airline also said it was on track to announce a three-digit aircraft order by the end of this year to serve the growing travel demand.

It seems Akasa, whose name translates to upper sky or space, is not allowing its exiting pilots to put limits on its ambition.