Rakesh Jhunjhunwala’s Akasa Air buys 72 Boeing 737, aims at Summer ’22 for its maiden flight

The Boeing 737 Max aircrafts are worth USD nine billion.

Akasa Air, promoted by billionaire investor Rakesh Jhunjhunwala, has placed on order for 72 Boeing 737 Max aircraft. The deal—inclusive of the B737-8 and the high-capacity B-737-200 aircraft — is worth USD nine billion at list prices. Currently, Spicejet is the only Indian carrier to operate B737s.

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Flying display of a Boeing B737-8 Max at the Farnborough International Airshow, UK. Image: Shutterstock/Andreas Zeitler.

SNV Aviation, which owns the Akasa Air brand, aims to take to the skies next summer. It hopes to operate the full fleet over the subsequent four years. Jhunjhunwala has a 40 percent stake in the new airline, followed by a 15 percent stake held by Vinay Dube, former CEO of Jet Airways, and 10 percent with Aditya Ghosh, former President, Indigo Airlines.

Industry experts express pleasant surprise at the coming together of these industry veterans to introduce another carrier when incumbents are reeling under losses imposed by the pandemic. But Akasa is betting big on the recent strong recovery exhibited by the aviation sector and pent-up demand that is likely to play out over several decades. The accent is on democratising air travel with traditional facilities such as food, seat selection, cabin, and check-in baggage being made available at extra cost.

The choice of the narrow body B737-8 Max aircraft fits with this ethos. Boeing claims that apart from being fit for purpose, the planes register 14 percent better fuel efficiency and lower emissions. Incidentally, India had banned the operation of B737 planes in March 2019 after an air crash in Ethiopia. Restrictions were lifted in August this year following hardware and software improvements in the plane.

For good measure, SNV Aviation has also entered into a USD 4.5 billion deal with CFM International towards the purchase, spares, and service of LEAP-1B engines that power the B737s. These developments augur well for Boeing, which has so far lagged behind European rival Airbus in India. Thus far, the latter has about 65 percent share of the 666 aircraft registered in India, with the former weighing in at just 21 percent. Airbus also has a healthy order book, including that for 300 A320s from Indigo Airlines.

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For good measure, SNV Aviation has also entered into a USD 4.5 billion deal with CFM International towards purchase, spares, and service of LEAP-1B engines that power the B737s. Image: Shutterstock/Andreas Zeitler.

In the future, Boeing expects the tide to turn even more. According to its 2021 Commercial Market Outlook forecast, there will be a demand for more than 2,200 new aircraft in the South Asian market over the next 20 years. Potential business is valued at almost USD 320 billion.

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