IndiGo has been the market leader in the aviation sector for the last few years. This is because of availing affordable flight services and also because of the kind of business model that the airline has. With the arrival of the pandemic, not just IndiGo, but every other airline and the entire aviation sector dealt with huge challenges.
However, those challenges are getting easier for the airlines now as the consumer confidence in travelling is increasing day by day. But IndiGo’s challenges won’t just be the recovery from the losses of the pandemic, but also the expected competition with Akasa Air.
Akasa Air, an Ultra-Low-Cost Airline Can Give IndiGo Serious Competition
Akasa Air, backed by Rakesh Jhunjhunwala, is an upcoming ultra-low-cost airline that is expected to start providing services in the Indian market in the first quarter of 2022. The airline has already signed a $9 billion order deal with Boeing for 72 Boeing 737 Max aircraft.
The business model of Akasa Air might not be too much different from IndiGo. While the rising fuel costs are a worry for the upcoming airline, it will still have a lot of attention from the consumers who want to travel within budget.
The fares for the flights that will be operated by Akasa is too early to say at the moment. But note that they could be lesser than what IndiGo is offering to the customers. IndiGo will have to stay on its feet if it wants to keep its badge of having more than half the passenger traffic market share in India.
Akasa Air could model its business to do something that Reliance Jio did in its early days to disrupt the competition. Since Akasa Air is a new airline and has no debt, it will be able to push its operations more aggressively than the other loss-making airlines in the country.