Akasa Air Flies Past Spicejet To Become India's Third-Largest Airline By Revenue

(MENAFN- Live Mint)

Mumbai and Bengaluru: Three years after its debut, Akasa Air soared past SpiceJet to become the country's third-largest air carrier by revenue following a sharp 24% sequential decline in the latter's revenue in the April-June period.

SNV Aviation Private Limited, which launched its first commercial flight in August 2022 under Akasa Air, in a disclosure dated 14 July made to the ministry of corporate affairs, said its provisional revenue from operations totalled ₹1,399.6 crore during the April-June period. This was a 22.2% rise from the ₹1,145.4 crore in the April-June period of last year.

On Friday, New Delhi-based SpiceJet reported that its revenue from operations fell 24% sequentially and 35.6% from the year-ago period to ₹1,059.8 crore in the April-June quarter.

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Mumbai-based Akasa Air has consistently had a higher market share than SpiceJet since May last year: Akasa's 5.5% share in July was more than double that of 2% of SpiceJet, according to data released by the Directorate General of Civil Aviation.

However, this is the first time that Akasa's revenue has surpassed that of SpiceJet's in a quarter. Akasa ended FY25 with ₹4,582.72 crore in revenue and ₹1,983.4 crore in loss, compared to ₹5,073.7 crore in revenue and ₹52.6 crore profit reported by SpiceJet.

"The reason behind Akasa's success is that, firstly, it is a new airline, hence it is well funded, and the industry is also growing. Secondly, an incumbent from a successful airline is running the show, which brings in efficient strategies and helps them to develop their business," said Vinit Bolinjkar, head of research at Ventura Securities Ltd.

In the first quarter, Akasa's ₹365.5 crore provisional loss is more than SpiceJet's ₹236.5 crore loss.

“Since Akasa is a new airline, initially the losses are going to be high. The thing to watch is how quickly they can lower their losses," said Bolinjkar.

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Akasa's board member and co-founder Aditya Ghosh, chief financial officer Ankur Goel, and general counsel Priya Mehra were previously with IndiGo, India's largest airline.

InterGlobe Aviation, which runs IndiGo, ended with ₹80,802 crore in revenue and ₹7,248.9 crore profit in FY25. The Tata Group-owned Air India ended with ₹78,636 crore in revenue and a ₹10,859 crore loss.

The country's domestic air passenger traffic declined by 7.6% to 165.4 million in the year ended March 2025.

Karan Khanna, lead analyst for hotels, aviation, property and small and midcaps, Ambit Capital, notes that Akasa aspires to replicate IndiGo's low-cost operating model and is following IndiGo's playbook on overall expansion.“Given the better capital structure as compared to some of their peers, they are also able to focus on expanding their international routes and are focused on building a long-term market share," Khanna said.

At the heart of SpiceJet's troubles is its inability to raise funds, leading to delays in employee salaries and defaults on payments to aircraft lessors, some of whom have repossessed planes.

Over the years, as homegrown carriers have added planes to their fleet, SpiceJet's fleet has dwindled: The carrier's fleet has dropped from 88 planes at the end of March 2022 to 61 at the end of March 2025. Only 40% or 25 of SpiceJet's planes are operational, according to an investor presentation dated 14 June.

“SpiceJet has got too many distractions with which they are not able to focus on their business, for example their brand has taken a hit because they don't have in-time services, and their losses are mounting," said Bolinjkar.

SpiceJet attributes its weak performance to“geopolitical situation in our neighbourhood", which led to some restrictions on planes flying.“Additionally, delays in the return to service of grounded aircraft due to global supply chain and engine overhaul constraints further reduced our available capacity, directly affecting revenue," said a spokesperson for SpiceJet.

The spokesperson said the carrier's“primary focus is on profitable and sustainable growth".

Akasa expects to add five more planes to its current fleet of 30 leased planes by the end of the current fiscal year, even as it expects to receive its entire order of 226 Boeing 737 Max aircraft by 2032.

Akasa, which started with an investment of ₹260 crore from investor Rakesh Jhunjhunwala in August 2022, recently raised ₹1,200 crore from the family offices of Bengaluru-based billionaires Azim Premji and Ranjan Pai, as well as wealth and asset management firm 360 One Wam Ltd.

Akasa Air co-founder and chief executive officer Vinay Dube and the Jhunjhunwala family owned about 75% of the carrier, according to a 12 May note by ratings firm Icra. The shareholding has changed after investments from Premji and Pai.

Text messages and calls to Dube went unanswered.

“Customers will choose Akasa because there are limited services around there and there are so many new airports that are going to be announced. Continuously, the airport count is going to go up and international is also opening up. So the competition is not very intense," said Bolinjkar.

However, this impressive start by Akasa now sets up a bigger challenge ahead of the country's youngest carrier: competing against the two largest carriers, IndiGo and Air India. IndiGo and Air India, with market shares of 65.2% and 26.2%, respectively, held a combined 91.4% share of the domestic aviation market in July, forming a duopoly.

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To put these numbers in perspective, Akasa flew 76.93 lakh passengers in FY25, which was less than what IndiGo flew every month.

The other challenge faced by Akasa Air is that its entire fleet consists of a single aircraft model, the Boeing 737 Max, a model that has been temporarily grounded worldwide in the past due to safety and manufacturing issues.

The other issue faced by Akasa is the promised delivery of planes by Boeing.

“We understand that Boeing aircraft deliveries were delayed in FY25 due to strike at its US facilities by its unionized machinists that lasted about seven weeks, which caused a temporary halt and disruption in production," said the 14 July valuation note commissioned by Akasa.“The strike ended in early November 2024, after which Boeing resumed production."

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