Thursday, October 5, 2023

Akasa Air’s Three Pillars: Fleet Expansion, Market Exploration & Employee Retention

By Aritra Banerjee

The aviation sector in India, often seen as saturated by industry experts, presents a contrasting perspective to Aditya Ghosh, co-founder of Akasa Air. In a recent interview, Ghosh emphasised the concept of under-penetration. While the majority view the sector as nearing its peak, Ghosh presents an argument of continued growth, particularly in India.

At the 19th Motilal Oswal Annual Global Investor Conference, Ghosh alluded to a consistent demand for air travel, pandemic notwithstanding. The inherent desire for connectivity, both domestic and international, hints at potential growth avenues for airlines like Akasa.

Strategies In Fleet Expansion

As seen in Akasa Air’s fleet expansion, concrete steps accompany Ghosh’s perspectives. Recent acquisitions, including 72 aircraft with an additional four this season, are indicative of the airlines’ growth trajectory. Moreover, the co-founder hints at another significant order, reflecting the airline’s future aspirations.

Measuring Success: Beyond Market Share

For many airlines, market share is a defining measure of success. Ghosh, however, pivots towards a customer-driven approach. He suggests that emphasising efficiency, customer service, and competitive pricing would inherently lead to an increased market share without it being the primary focus.

Assessing The Indian Aviation Landscape

Several factors contribute to the revived demand in air travel. The nation’s economic goals, a changing demographic that leans younger and is more open to modern air travel, and infrastructural advancements in airports are central to this trend. Despite India’s significant population growth, Ghosh highlights that its commercial fleet size hasn’t seen proportionate expansion. This observation presents a potential gap in the market.

Venturing Beyond Domestic Borders

Akasa Air is looking beyond domestic operations, targeting international routes. Including the Boeing 737 MAX 8-200 in their arsenal suggests that the airline is evaluating markets like the SAARC nations, Middle East, and Southeast Asia. This diversified fleet offers Akasa the flexibility to cater to domestic and international demands.

Employee Retention: A Central Strategy

In a rapidly changing aviation landscape, the airline seems to prioritise its workforce. With pilot salary revisions taking place twice this year, Akasa aims to stay competitive and retain its employees in a market known for its volatility.

The airline’s Chief Executive Officer, Vinay Dube, provides an insight into Akasa’s long-term vision, highlighting the airline’s strategic planning. As the market dynamics continue to shift, Akasa’s approach suggests a blend of growth-driven aspirations and grounded strategies.

Summarising Akasa’s approach, one could argue that opportunities exist even in seemingly crowded markets. With focused strategies and a keen understanding of customer needs, growth is achievable, showcasing that the sky might just be a starting point in the aviation world.

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