Akasa Air, India’s youngest airline, has raised an undisclosed sum from a number of investors, including the family offices of Bengaluru-based billionaires Azim Premji and Ranjan Pai.
Akasa Air, which started flying in 2022, has become the country’s third-largest carrier with a market share of 4.6%. Media reports in the past had said the airline was in talks to raise between $130 and $140 million.
“These are not just financial transactions; they are an investment in our vision and commitment to building an airline for generations,” Akasa Air founder and chief executive officer Vinay Dube said in a statement on Thursday.
Dube said the fresh funding should help the carrier become one of the top 30 global airlines by the end of 2030.
Key investors join Akasa’s growth journey
The family office of late Rakesh Jhunjhunwala, who first invested in the airline three years ago, also agreed to invest more money in this fundraising round, along with financial services firm 360 One Asset.
“We can confirm that we have signed an investment agreement with Akasa Air that is subject to regulatory approval,” said a spokesperson for Premji Invest. “No additional information will be provided until all regulatory approvals are obtained.”
Akasa’s fundraising comes amid growing concerns that the country’s aviation market could become a two-horse race. InterGlobe, which runs the country’s lartgest airline IndiGo, and Tata-backed Air India together have a 90% share.
“From a macroeconomic standpoint, India needs a third carrier with 160 million passengers and the third-largest market. It cannot be limited to becoming a duopoly market. So, for Akasa Air, which seasoned professionals run, this money will help [it] scale up. From Akasa’s perspective, this capital will help them in terms of working capital and adding more fleet and people,” said an aviation consultant, requesting not to named.
Akasa Air carried 73.81 lakh passengers in 2024 and had a market share of 4.6%, according to the Directorate General of Civil Aviation data. IndiGo had a 61.9% share, followed by a 28.4% share with Air India.
“This is a welcome step and good for Akasa’s future. This will bring stability and ability to pursue their business plan with confidence,” said Kapil Kaul, chief executive officer for Centre for Asia Pacific Aviation India. “It is a good sign for Indian aviation.”
In an interview with Mint last month, Dube said that the airline is not chasing a particular market share but aims to grow in number, eventually improving its market share.
“This new fundraising round will add great impetus to its fleet expansion and growth plans, and should propel the airline into a higher orbit,” said Sanjay Lazar, CEO of Avialaz Consultants.
Navigating growth amid challenges
According to the financials filed with the Ministry of Corporate Affairs, Akasa’s total revenue for the year ended 31 March 2024 rose more than four-fold to ₹3,144.4 crore, from ₹778 crore in the preceding year. However, its losses expanded from ₹744.53 crore to ₹1,670 crore last year.
Akasa Air has a fleet of 27 Boeing 737 MAX narrowbody aircraft. The company has pending delivery of over 200 Boeing MAX aircraft. US-based aircraft manufacturer Boeing is expected to deliver 24 aircraft to Indian airlines in 2025. The airline currently flies to 22 domestic and 5 international cities.
