Akasa Air’s Financial Journey and Strategic Plans in FY24
Indian budget airline Akasa Air has disclosed its financial outcomes for the fiscal year 2024, which concluded on March 31, 2024. Since its inaugural flight in August 2022, Akasa Air has shown significant growth in passenger revenues, although it continues to navigate the challenges typical of new airlines aiming for profitability. The results, filed by its parent company SNV Aviation with the Indian Corporate Affairs Ministry, reveal a substantial increase in revenue and operational scale after two years in the skies.
In FY24, Akasa Air generated a revenue of 3,144 Crore ($421 million), a significant increase from 777.84 Crore ($103.7 million) reported in FY23. Despite this revenue growth, the airline faced a net loss of 1,670 Crore ($225 million), which more than doubled from the previous year’s loss of 744.53 Crore ($100.4 million). Total expenditure surged to 4,814.44 Crore ($564.8 million), up from 1,522.27 Crore ($205.4 million).
According to Ankur Goel, the Chief Financial Officer of Akasa Air, the initial years for any airline are focused on foundational investments such as fleet acquisition, staff training, and network development. These investments are critical even though they lead to initial financial losses. Goel emphasized, ‘The foundational years of any airline are dedicated to investing in its people, fleet, training, operating infrastructure, and network, and hence no airline registers P&L profits in these years.’
Despite these challenges, Goel expressed optimism regarding the airline’s future. He outlined several strategies aimed at achieving profitability. These include significant revenue growth, managing higher operational costs, yield improvement, continued infrastructure development, fleet expansion, and investing in personnel. He remarked, ‘These numbers demonstrate the typical growth pattern of a new airline focusing on market establishment and operational expansion.’
During FY24, Akasa Air expanded its capacity threefold year-over-year. The revenue per Available Seat Kilometers (ASKs) saw an increase of 10%. However, the airline’s current liabilities exceeded its assets by 210.76 Crore ($28.3 million). The fleet consisted of 26 Boeing 737 aircraft, including 23 737 MAX 8s and three 737-8-200s. Akasa operates over 110 daily flights, covering 63 routes across 28 destinations in five countries. It holds approximately 4% to 5% of the Indian domestic market share, as per the Directorate General of Civil Aviation (DGCA).
Looking forward, Akasa Air is planning an ambitious expansion. The airline aims to raise $1 billion through debt and equity over the next three years to increase its fleet and market share. This expansion includes the delivery of 200 additional aircraft, comprising 99 737 MAX 10s and 101 737 8-200s. The Jhunjhunwala family and Akasa’s co-founder and CEO, Vinay Dube, are major shareholders, holding 40% and 25% of the airline, respectively. Furthermore, a consortium led by Premji Invest and Claypond Capital is reportedly considering an investment of about $125 million in Akasa Air.