We have launched our mobile app, get it now. Call : 9354229384, 9354252518, 9999830584.  

Current Affairs

India’s aviation market

Date: 03 August 2021 Tags: Infrastructure

Issue

India’s aviation industry will be witnessing new players in form of Akasa,  backed by Rakesh Jhunjhunwala and Jet Airways 2.0.

 

Background

Aviation sector is currently in distress due to the pandemic induced lockdown and also failure of major companies such as Air India and Jet Airways.

 

Details

  • Stock market investor and Big Bull, Rakesh Jhunjhunwala holds a 40% market share in the Akasa airline company.

  • Akasa will be an Ultra Low Cost Carrier (ULCC). The airline is being planned to be launched in April 2022. It will be run by several aviation industry experts.

  • About $35 million will be invested by Jhunjhunwala and will consist of a fleet of 70 aircrafts over the next 4 years.

 

Aviation market in India

  • Indigo airlines currently hold the highest market share with 54%. It is followed by companies such as Vistara, Air India, GoAir, SpiceJet, AirAsia India etc.

  • The GoAir is rebranding itself as GoFirst and has already conducted IPO. It will soon model itself as Ultra Low Cost Carrier.

 

Potential for new players

The current vacuum has been created after Air India disinvestment and failure of Jet Airways. There is a threat that market will be consolidated.

 

ULCC model

  • The operating costs of aircrafts will be lower than even the budget airlines like IndiGo or SpiceJet. They will remove several services such as meals and other amenities.

  • In addition to the model of budget airlines, ULCC will go ahead and remove several other services such as checked-in baggage, cabin baggage etc to get maximum profits.