Judith Philip is stressed. The auditor's work schedule is packed and she only has one retreat, but the Pandemic hit her badly. Philip is hoping to go on a solo trip to Sri Lanka.
Philip told Insider that he might do a lot of revenge travel once the restrictions are lifted.
Millions of travelers are waiting in the wings to travel to India as the country's aviation sector braces for a shake-up. Akasa Air is the new airline at the center of this shake-up. Akasa has become the most talked about airline in the country. On November 16 it placed a $9 billion order for 72 Boeing MAX jets. Industry analysts say that the airline could potentially lift up the entire Indian aviation segment, which has been grappling for several years.
Akasa's fleet will mostly be based in the Indian tech capital of Bangalore, unlike airlines that ground their fleets in Delhi or Mumbai. Akasa's routes are expected to reach less traveled destinations at less expensive fares.
The carrier is backed by a billionaire investor who is nicknamed India's Warren Buffet and Big Bull for his smart investments.
The market is crowded, and difficult to turn a profit in, as Jhunjhunwala and Akasa enter the aviation industry at a historically difficult time.
Jhunjhunwala did not respond to multiple requests for comment.
There is room for growth.
Air travel was only affordable for the wealthy in India until the turn of the decade.
India has about 650 passenger jets. Domestic airlines carried more than 120 million flyers in 2019. The US has over 5,000 civilian aircraft, while China has close to 3,700 passenger jets.
In India, trains are the preferred mode for long-distance journeys. In the 12 months ending in March 2020, Indian trains carried over eight billion travelers.
Air travel is becoming a viable mode of transport for more people as India's middle class grows and airlines keep the price of domestic airfare low. Delhi plans to open over 200 new airports in the next four years and is rapidly expanding the existing airports. Civil aviation is expected to play a crucial role in India's goal of making it a $5 trillion economy by 2024.
"We can expect huge growth in the next five to 10 years," said the chief strategy and revenue officer of IndiGo. India's market leader in domestic traffic is IndiGo.
The growing middle-class population will travel the same way as the Americans or Chinese. Kumar said that they haven't seen this in India.
The market is volatile.
India was home to the fastest-growing aviation market in the world until the second half of last year.
Taxes on jet fuel, crew shortage, and unsustainable business models caused growth to nosedive in 2019.
Jet Airways, the country's oldest and first successful private airline, collapsed in the midst of India's airline crisis. Jet Airways was killed by mounting debts, poor acquisitions, and cheaper prices offered by rivals.
Over the past three decades, about 50 players in the Indian aviation market have closed their doors.
The industry was decimated by the Pandemic.
A troubled industry means abundant talent in the market for hire, low asset costs, and weakened competitors, factors that could play a role in Jhunjhunwala's favor.
Low-cost carriers dominated the market.
Unlike the aviation markets of the western world, where the segment is multi-tiered and caters to a wide range of travelers, carriers in India need to keep a close watch on ticket costs. Low-cost carrier models make a profit by selling seats at cheap rates, and they make up 80% of the market share in India.
IndiGo, SpiceJet, GoAir, and other large airlines dominate the domestic skies in India. Vistara and Air India are classified as no frills carriers.
Every little space inside the plane is for sale for advertising, which is why Akasa is an ultra low-cost carrier. Akasa can keep the seat fares separate from all other services like food and cut back on all expendable costs. It is similar to the Spirit Airlines of India.
If the industry is correct, Akasa is expected to launch in the early or mid-twenties. The former CEO of Jet Airways and the former CEO of Indigo have been hired by Akasa. Regulatory approvals are on track.
The fate of Akasa depends on more than one person. The airline's success can be attributed to how it manages its fleet composition, distribution models, and choice of flying destinations.
70% of all passenger aircraft in India are from the A320 family.
Boeing has an opportunity to make a breakthrough in a crucial market with the advent of Akasa.
In a television interview in July, Jhunjhunwala said Akasa hopes to have 70 aircraft in four years. There will be demand for 2,200 commercial jets in the next two decades according to Boeing.
Domestic traffic is leading the recovery in India. "We're seeing double-digit monthly improvements in operations as vaccine rates improve and travel restrictions begin to loosen," said the president of Boeing India.
Gupte thinks passenger traffic numbers in India will go to pre-pandemic levels by the year 2024.
Stan Deal, Boeing commercial airplanes president and CEO, said, "We are honored that Akasa Air, an innovative airline focused on customer experience and environmentalsustainability, has placed its trust in the 737 family to drive affordable passenger service in one of the world's fastest-growing aviation regions."
There are challenges ahead.
Civil aviation experts say Jhunjhunwala's Akasa is set to take Indian aviation to new heights.
40% of an airline's cost structure is fixed costs, according to IndiGo's Kumar. Industry experts said that Akasa must get the correct combination to be successful.
Satyendra Pandey, managing partner at India-based aviation services firm AT-TV, said that a well-capitalized new entrant may be able to gain a strong foothold.
Rival carriers are bound to match Akasa's fares from day one, which means it will be entering a profitless growth environment.
Business and behavioral trends should be included in a careful assessment of the market.
Western frameworks do not work. Getting this wrong has meant that airlines have failed to turn a profit. The lyres that worked before the disease may not work the same again.
Manvi Hooda, chief of consulting and research at the aviation consulting firm, CAPA India, said that if the ULCC model is implemented, Akasa Air may expand the overall market by stimulation due to low airfares.
India is an under-penetrated air travel market. India is a value-sensitive market, so low airfares can be very stimulatory.
