Akasa Air, the ambitious new player in India’s aviation sector, reported a remarkable 339% year-on-year jump in its revenue for FY24, reaching ₹3,069.6 crore. However, this surge in revenue came with a significant downside as the airline’s losses also ballooned, more than doubling to ₹1,670.1 crore, up from ₹44.5 crore in FY23. This financial performance marks Akasa’s first full fiscal year since its launch in August 2022, backed by the late Rakesh Jhunjhunwala’s investment firm SNV Aviation.
The airline’s rapid expansion strategy, which included increasing its fleet size and brand-building efforts, drove up operating expenses substantially. For FY24, Akasa’s total expenses surged to ₹4,814.4 crore, compared to ₹1,522.3 crore in FY23. Key drivers included rising employee costs, with employee benefits rising to ₹774.9 crore from ₹232.4 crore, due to a significant jump in headcount, particularly pilots. Despite these losses, Akasa’s CFO, remains optimistic, noting a 10% increase in revenue per available seat kilometre (RASK), driven by the airline’s expanding presence and improved operational capabilities. Akasa is targeting further growth in FY25, with an expected 50-55% increase in capacity, forecasting a 50% rise in revenue as a result, a more sustainable pace compared to the astronomical growth of FY24. For the airline’s customers, the focus on expanding routes and improving seat availability promises more options and potentially lower fares. But for the airline itself, the financial strain is a necessary short-term burden as it scales operations. While Akasa is betting on future profitability, the airline’s ability to maintain liquidity and manage rising costs will be critical as it seeks to balance growth with sustainability.
For frequent fliers and new customers, the promise of increased capacity means better connectivity and more affordable travel options in the future. However, the company’s financial struggles are a reminder of the tough road ahead for any new airline. For employees, the massive expansion in headcount provides job opportunities, especially for pilots, but the costs associated with rapid growth raise questions about the long-term sustainability of such a strategy. Akasa’s financial trajectory presents a mixed picture in terms of sustainability. While its growth indicates a strong market presence, it also reflects the high environmental and economic costs of rapid expansion. Sustainability should not only be measured by profit margins but also by how efficiently the airline manages resources, including energy consumption, fuel efficiency, and waste management. Akasa’s investment in greener technologies and fuel-efficient aircraft will play a crucial role in aligning its growth ambitions with broader environmental goals.
