Akasa Air plans to go public, aims to be profitable by 2028: CEO Vinay Dube

Akasa Air, founded in 2021, has reported losses mounting to Rs 2,400 crore in its first two years

Budget airline Akasa Air has reported losses exceeding Rs 2,400 crore in its first two years, primarily due to its limited presence on profitable metro routes and rising costs associated with hiring pilots, exacerbated by delays in aircraft deliveries from Boeing. Despite this, co-founder and CEO Vinay Dube remains optimistic that Akasa will achieve profitability within the next three years, he said in an interview with The Economic Times on Monday. The airline also plans to go public by 2028.

Akasa Air: A product of the Covid-19 pandemic

Speaking on the launch of the airline, Dube attributes Akasa Air’s inception to the ‘unique’ circumstances created by the Covid-19 pandemic. In the interview, Dube revealed that the pandemic’s impact on the aviation industry, including a steep decline in aircraft rentals and an increase in the availability of pilots, cabin crew, and engineers, created an ideal environment to launch a new airline.

“That was literally the only circumstance under which I was willing to start an airline,” Dube told the newspaper.

Since its launch in 2021, Akasa Air rapidly expanded, boasting a fleet of 24 aircraft within just 24 months. Dube highlighted that securing the right assets at the right price was critical, as fuel efficiency, engine maintenance, and aircraft leasing costs comprise about 70 per cent of an airline’s expenses. Despite these achievements, the airline has reported losses exceeding Rs 2,400 crore in its first two years.

However, Dube remains optimistic, attributing the losses to gestation costs as the airline builds a solid foundation for future growth, driven by technology. Akasa Air has established an integrated operations control centre in Mumbai, launched a training academy, and is developing an AI solution to enhance customer interactions.

Akasa Air expansion plans

Also speaking to The Economic Times, co-founder Belson Coutinho stressed the airline’s focus on leveraging customer data to provide personalised services, enhancing brand loyalty. Praveen Iyer, co-founder and chief commercial officer, noted that Akasa’s strategy of expanding to leisure destinations like Dehradun and Srinagar has proven profitable. He also mentioned that the airline is gradually increasing aircraft utilisation, with planes now operating close to 13 hours daily.

Akasa Air shareholders

A consortium of family offices, including those of Wipro’s Azim Premji and Manipal Group’s Ranjan Pai, is reportedly in talks to invest about $125 million.

Dube reassured stakeholders that the initial investment of around Rs 250 crore from the family of the late stockbroker Rakesh Jhunjhunwala remains intact, emphasising the airline’s strategic investments, expansion, its goal to reach profitability and plans to public list by 2028.