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Updated on: Thursday, November 18, 2021, 04:42 PM IST

Teji Mandi Explains: Low-cost air carriers wear seat belts as Akasa Air set for takeoff

Teji Mandi Explains: Low-cost air carriers wear seat belts as Akasa Air set for takeoff | File Image

Teji Mandi Explains: Low-cost air carriers wear seat belts as Akasa Air set for takeoff | File Image

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When we think of Indian low-cost airlines, a couple of names that come to our mind are IndiGo, SpiceJet and Air Asia. Soon there will be another name added to the list: Akasa Air. The new low-cost airline is backed by the billionaire Rakesh Jhunjhunwala, which makes it enough to grab all the headlines. While Akasa spreads its wings, two Indian airlines stand cautiously. Let’s read in-between the lines!

What’s Happening In Aviation Space?

Post Jet Airways saga, two Indian low-cost air carriers - IndiGo and SpiceJet - ruled the domestic skies. But, now the tables have turned as Akasa Air prepares itself to join its competitors. Additionally, it’s important to remember that Air India is getting remodelled. If Tatas’ abide by the customer expectations, then Air India will stand up as direct big competition to others.

Currently, IndiGo is the country's largest carrier by fleet (approximately 275 aircraft) and domestic market share (around 56%). Meanwhile, SpiceJet’s overall numbers are dropping. The market share is around 8.5%, and the weekly flights have shrunk too.

Why Should It Bother You?

If your portfolio holds aviation stocks or if you’re planning to invest in it, then you need to know what’s the ground reality of this sector. Akasa Air will be a direct competitor of IndiGo because its ex-President Aditya Ghosh will join the airline.

Former Jet Airways CEO Vinay Dube will run the company, and Ghosh is expected to be on the board. This only proves that Akasa will have an experienced team of aviation veterans, which stands as a positive.

What Lies Ahead?

By now, it’s evident that the entire landscape of the Indian aviation market will change by next year. A $1 rise in fuel price can cost crores of money to an airline. Looking at the Indian market, the launch of Akasa Air and the arrival of Air India remains a crucial point. Once these two get in action, there would be a few airlines taking a major hit. Overall, the sector appears to be bright and is expected to bounce back after rising passenger capacity and vaccination rollout.

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Published on: Thursday, November 18, 2021, 04:42 PM IST
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