Akasa Air Prepares For 3-Digit Aircraft Order & Eyes Stock Market Listing

Summary

Akasa Air plans to order a significant number of aircraft in the next 75 days to foster growth.
With a strong cash position and positive financial performance in its first year, Akasa Air aims to expand its fleet to 76 aircraft by mid-2027 and start international services by the end of fiscal year 2023.
While an Initial Public Offering (IPO) is in sight, Akasa Air’s CEO believes it is unlikely to happen before the end of the decade as the airline first needs to further establish itself in the Indian market.

SIMPLEFLYING VIDEO OF THE DAY

SCROLL TO CONTINUE WITH CONTENT

India is one of the world’s fastest-growing aviation markets. While the flag carrier, Air India, is undergoing a significant restructuring process, low-cost carriers are leveraging the strong demand for air travel that has been characterizing this market over the past few years. One of the newest, Akasa Air, is among the latest Indian airlines to mirror the country’s florid aviation industry, with its plans for a massive three-digit aircraft order and an IPO in sight.

Akasa Air eyes significant fleet expansion

Akasa Air started operating only 14 months ago. However, based on the positive results, the carrier’s management is confident demand will continue to grow. Therefore, Akasa Air announced a massive three-digit aircraft order to be placed in the next 75 days.

Rumor has it the airline has plans to raise $400 million. Nonetheless, Akasa Air co-founder and CEO Vinay Dube stated the airline has enough funds to place the aircraft order by the end of 2023. Akasa Air already has a relevant order book for 56 Boeing 737 MAX aircraft- four Boeing 737-8s and 52 Boeing 737-8-200s.

Photo: Akasa Air

According to Dube, over the first 14 months of operations, the Indian carrier has been generating cash. Consequently, the strong cash position will enable Akasa Air to place the significant aircraft order without seeking any other external funding source.

Akasa Air’s future outlook

Akasa Air’s maiden flight was on August 7th, 2022. One year and two months later, the airline has conquered a relevant share of the Indian market.

Akasa Air currently operates more than 750 weekly flights covering a network of 16 domestic destinations, including major Indian hubs such as Mumbai, Bengaluru, and Delhi. By the end of fiscal year 2023, the airline hopes to start international services. The carrier has already received international flying rights for Riyadh, Jeddah, Doha, and Kuwait.

Photo: Yatrik Sheth | Shutterstock

To sustain its growth plans, Akasa Air aims to operate a fleet of 76 aircraft by mid-2027. In the short term, the carrier expects to receive two additional Boeing aircraft by the end of this calendar year.

If everything goes according to plans, Akasa Air will close the current financial year with 25 aircraft. Additionally, the carrier expects to almost double its fleet over a year, closing the financial year 2024 with 40 aircraft.

We should expect an IPO, but not before the end of the decade

The positive first year has already directed the attention of Akasa Air’s management toward the possibility of launching an Initial Public Offering (IPO) for the airline.

However, the stock market listing should not happen before the end of the decade. According to the airline’s CEO, Akasa Air still needs to grow and position itself as a relevant player in the Indian market, where it now holds a 4.2% market share. According to Dube, it is unlikely that the airline will go for an IPO in 2027 when the airline expects to operate 76 aircraft.