The newest airline in India, Akasa Air, said on 18 January, Thursday that it has ordered 150 Boeing 737 MAX planes. The aircraft will be utilized to initiate new routes in both domestic and foreign markets. Supported by the Jhunjhunwala family, a prominent stock trader, the airline had previously placed an order for 76 Boeing 737 MAX aircraft.
Since it began operations in 2022, Akasa has grown its market share to 4% from IndiGo’s 60% and the combined 26% of Tata Group airlines. Now that it is qualified to do so, the airline is preparing to begin operations abroad.
A quick overview of Akasa Airlines
Aditya Ghosh and Vinay Dube founded the Indian low-cost airline Akasa Air in Mumbai, Maharashtra. Akasa Air, a brand of SNV Aviation Private Limited, began commercial operations in August 2022, serving Mumbai to Ahmedabad. With a 46% stake in investor Rakesh Jhunjhunwala, the airline aims to have a fleet of approximately 72 aircraft within five years.
However, Dube announced that the airline would initially serve metro cities, tier-2, and tier-3 cities, and major cities across India, with 22 aircraft currently operating to 16 destinations and an additional 54 aircraft ordered, Boeing’s 737 MAX, the fourth generation of the 737, is a narrow-body airliner that competes with the Airbus A320neo family. Launched in 2011, it took its maiden flight in 2016 and was certified by the FAA in March 2017, succeeding the Boeing 737 Next Generation (NG).
Program launch of 737 MAX by Akasa Air
Boeing’s board approved the launch of the re-engined 737 MAX in 2011, expecting a 4% lower fuel burn than the Airbus A320neo. The 737 MAX was designed with additional drag reduction features, including a revised tail cone, natural laminar flow nacelle, and hybrid laminar flow vertical stabilizer. Boeing abandoned the development of a new design under its Yellowstone Project to focus on the re-engine project.
Although , After obtaining its first Boeing 737 MAX 8, the airline started doing business on August 7, 2022, with its inaugural trip from Mumbai to Ahmedabad. Vinay Dube, the CEO of Akasa Air, said that the company wants to have about 72 aircraft in its fleet in five years.
Boeing’s business strategy for the 737 has been influenced by the cost of re-engineing the aircraft. In 2010, the estimated cost was estimated to be between $2-3 billion, including the development of the CFM engine. However, this cost was only 10-15% of the cost of a new program, which was estimated at $10-12 billion at the time.
The MAX development cost could have been well over the internal target of $2 billion, closer to $4 billion. The 737NG has reduced fuel consumption by 14%, and Southwest Airlines was signed up as the launch customer in 2011. In 2014, McNerney announced that the 737 would be replaced by a new airplane by 2030, likely using composite materials. Boeing considered developing a clean sheet aircraft to replace the 737, using advanced composite technology developed for the 787 Dreamliner.
Can Akasa Air find a position in the Indian airline industry?
The Akasa Air agreement joins a flurry of orders Indian carriers placed last year, banking on the country’s expanding middle class to drive demand for travel as low-cost carriers offer low ticket costs. The largest airline in India, IndiGo, together with Air India, has signed historic contracts with Boeing and Airbus for over 900 aircraft.
However, Akasa announced last week that it had finished a “thorough inspection” of all of the 737 Max aircraft it currently operates and that no “adverse findings” had been discovered. Air India and IndiGo, who hold nearly three-quarters of the country’s very competitive aviation sector, compete with Akasa. With a 4.4% market share, the airline has had difficulties along the road. Last year, rivals pushed it to reduce its schedule after stealing some of its pilots, and the death of billionaire backer Rakesh Jhunjhunwala in 2022 raised questions about the company’s financial stability.
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