Boeing deliveries on track as India’s Akasa goes international, CEO says

By Thomson Reuters Mar 20, 2024 | 7:43 AM

By Aditya Kalra and Aditi Shah

NEW DELHI (Reuters) – India’s Akasa Air is confident that deliveries of its ordered Boeing 737 MAX jets will be on time, its CEO said, despite concerns over the U.S. planemaker’s production schedule for 737s amid intense scrutiny after a mid-air incident this year.

India’s newest airline in January announced an order for 150 Boeing 737s, as it bets big on its international operations. The order announcement came days after a mid-air cabin panel blowout on an Alaska Air flight.

Though Akasa’s order does not include the 737 Max 9 version which has been in the spotlight after the incident, broader internal company scrutiny and external investigations in the U.S. have raised worries that delivery timeline of other variants of Boeing’s 737 jetliner programme could be hit.

“We’re in very, very close touch with Boeing. Our delivery schedule is as per the expectations and agreements that we develop with them,” Vinay Dube, founder and CEO of Akasa, told Reuters in an interview on Wednesday.

Akasa’s current fleet includes 24 Boeing aircraft of the total 226 it has on order which are expected to be delivered over 8 years. Dube declined to give a year-wise breakup.

On March 28, Akasa will kick-off its first international flight to Doha from Mumbai which will be followed by other Middle Eastern destinations including Kuwait, Riyadh and Jeddah, and then some Southeast Asian countries.

Although India is now the world’s fastest-growing aviation market, with travel demand outstripping the supply of planes, the bulk of international traffic is captured by global carriers such as Emirates.

While Dube did not share details of how much capacity the airline would deploy on foreign routes, he said the ambition is to grow international “very fast” because of comparatively lower costs and higher revenues versus domestic.

“International revenues tend to hold up a little better over a period of time. You’d see us be a little more aggressive on international than perhaps other airlines have historically been,” he added.

Akasa’s rival, IndiGo in June placed a record order for 500 Airbus narrowbody planes, eclipsing Air India’s purchase of 470 combined jets from Airbus and Boeing earlier last year.

These airlines are betting big on air travel growth in India, a country where pilots are already in short supply. Go First, a budget carrier, is undergoing bankruptcy proceedings, while SpiceJet has battled a cash crunch in recent months.

In India, Dube said: “the biggest challenge is running a good airline.”

(Reporting by Aditya Kalra and Aditi Shah; editing by David Evans)