Indian budget carrier Akasa Air has released figures reporting its financial performance for the 2024 financial year (FY24) which ended on March 31, 2024. The fledgling carrier which first flew in August 2022, saw an impressive rise in passenger revenues although profitability appears to remain some way off for the airline. Parent company SNV Aviation filed its latest results with the Indian Corporate Affairs Ministry recording the airline’s performance after two years of operations.
In terms of revenues, the airline reportedly earned 3,144 Crore ($421 million) during FY24, up from 777.84 Crore ($103.7 million) in FY23. However, the airline reported a loss of 1,670 Crore ($225 million). This number represents a more than doubling over the FY23 figure of 744.53 Crore ($100.4 million). Total expenditure increased to 4,814.44 Crore ($564.8 million) from 1,522.27 Crore ($205.4 million). The airline stated that while operating expenses drove cash burn faster than anticipated, the carrier continued to maintain a net cash-positive position through the high rise in revenues.
“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,” said Chief Financial Officer Ankur Goel, defending the airline’s performance.
However, Goel remains positive about the budget carrier’s future, stating that an emphasis on the airline’s focus on various strategies will remain key to the carrier reaching a critical mass and ultimately, profitability. These strategies include continuing significant revenue growth, managing higher operational costs, yield improvement, continued infrastructure development, fleet, and network expansion, and investing in personnel.
“These numbers demonstrate the typical growth pattern of a new airline focusing on market establishment and operational expansion,” said Goel, adding that new airlines require multiple years to achieve break-even operations.
Taking an overview of FY24, Akasa Air’s performance included a tripling of capacity year-over-year, with revenues per Available Seat Kilometers (ASKs) increasing by 10%. Current liabilities exceeded assets by 210.76 Crore ($28.3 million). The airline currently operates a fleet of 26 airplanes comprising 26 Boeing 737s – 23 737 MAX 8s and three 737-8-200s (the low-cost high-density model). The airline currently operates more than 110 flights daily, flying 63 routes to 28 destinations across five countries.
According to DGCA, the regulatory body in India, Akasa Air is currently holding around 4% to 5% of the total market share in the Indian domestic market.
Looking ahead, the carrier is hoping to raise $1 billion in debt and equity over the next three years to expand its fleet and market share. The airline is expecting a further 200 planes to be delivered to it in the coming years including 99 737 MAX 10s plus 101 737 8-200s.
The carrier is currently largely owned by the Jhunjhunwala family which has a 40% shareholding along with Akasa’s co-founder and CEO, Vinay Dube who has around 25%. According to reports, a consortium led by Premji Invest and Claypond Capital is currently seeking to invest about $125 million in Akasa Air, according to the Economic Times.