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Current Affairs

Akasa

Date: 13 October 2021 Tags: Services

Issue

 The Ministry of Civil Aviation has given NOC to Akasa airlines, which is backed by stock-market investor Rakesh Jhunjhunwala.

 

Background

Akasa will be an ultra-low cost airlines owned by aviation venture SNV Aviation. Jhunjhunwala will own 40% stake in the venture.

 

Details

  • The services are expected to be launched by summer next year. The company has hired former Jet Airways CEO Vinay Dube and ex-IndiGo president Aditya Ghosh to run the airline.

  • Vinay Dube is expected to be the CEO and Ghosh will be on the board as Jhunjhunwala’s nominee.

  • Jhunjhunwala is expected to invest $35 million in the new venture. The company is planning to have a fleet of 70 planes over the next four years.

 

Ultra low-cost carriers (ULCC)

  • In this model of airline, the company will keep the operating costs lower than typical budget airlines like IndiGo and SpiceJet.

  • The ULCC model will further unbundle services such as checked-in baggage, cabin baggage, etc other than seat selection, food and beverages.

 

Challenges

  • It is difficult to run an airline on a ULCC model in India due to non-availability of no-frill airport terminals from where the lower costs are derived.

  • Such airports are common in Europe that makes it possible for airlines such as Ryan Air, EasyJet, etc to operate on this model.