Akasa Air Targets Asia’s Tourist Hotspots Amid Rising Travel Demand

Mumbai, July 31 2024 : Akasa Air, a budget airline based in Mumbai, is preparing to expand its international flight offerings in response to increasing demand for overseas travel among Indian tourists. The airline plans to launch flights to Kathmandu, Nepal, and Dhaka, Bangladesh, announced Praveen Iyer, Chief Commercial Officer at SNV Aviation Pvt, Akasa’s parent company.

To capitalize on the booming demand for international travel, Akasa Air is also eyeing other popular destinations across Southeast Asia and the Indian subcontinent. Potential new routes include Thailand, Vietnam, Malaysia, and Indonesia.

“Indians in general love traveling. That prompts us to look at the next set of expansion,” said Iyer. He highlighted that outbound travel from India, starting in October, is expected to be “very strong,” with Southeast Asian destinations contributing significantly.

Akasa Air’s rapid growth—initiated just two years ago with the addition of five overseas routes this year—reflects the rising demand for air travel among Indians as they grow wealthier and visa restrictions ease. The airline began its international operations in March with flights from Mumbai to Doha and has since added Gulf destinations, including Abu Dhabi and Jeddah.

As the airline industry in India becomes more competitive, Akasa is preparing for challenges. Tata Group-owned Air India and Vistara are merging, while market leader IndiGo plans to expand its long-haul international routes. Additionally, several overseas carriers, such as Etihad Airways and Malaysia Airlines, have introduced or increased flights to Indian cities.

Akasa Air has ordered 150 Boeing 737 Max jets, raising its total order book to 226 jets, expected to be delivered over the next eight years. The airline aims to expand its short-haul international network using its narrowbody fleet, capable of flying routes up to six hours.

Despite its rapid expansion, Akasa has already secured a 4.7% market share in India’s competitive aviation market, which has seen several carriers go bankrupt in recent years. IndiGo controls 61% of the market, while Air India holds 14.2%, according to data from India’s aviation regulator.

With a fleet of 24 jets operating 49 routes, Akasa has differentiated itself with niche offerings, such as allowing pets on board. Since implementing this policy in November 2022, the airline has carried 3,700 pets.

Akasa Air is well-capitalized and does not plan to raise additional funds, Iyer said, though he did not provide details on the carrier’s path to profitability. The airline’s expansion comes as India’s aviation industry undergoes consolidation, with larger rivals introducing new products to attract customers. Under Tata’s ownership, Air India will merge with Vistara, while Air India Express will combine with AIX Connect. IndiGo is expected to introduce a new premium cabin soon.

Both IndiGo and Air India have placed record aircraft orders with manufacturers. “We will always be around two 800-pound gorillas, right? One is the Tata group and the other is IndiGo. That’s the reality,” said Iyer. “How we build our network is what matters to us.”