Akasa Air Reports Strong Revenue Growth Despite Losses in FY24

Indian budget carrier Akasa Air has shared its financial performance for the fiscal year 2024 (FY24), which concluded on March 31, 2024. The airline, which commenced operations in August 2022, demonstrated remarkable growth in passenger revenues, although it continues to face challenges in achieving profitability. Parent company SNV Aviation disclosed these results as part of its filings with the Indian Corporate Affairs Ministry.

In FY24, Akasa Air generated revenues of 3,144 Crore ($421 million), a significant increase from 777.84 Crore ($103.7 million) in FY23. However, the airline also reported a loss of 1,670 Crore ($225 million), more than doubling the FY23 loss of 744.53 Crore ($100.4 million). Total expenditures soared to 4,814.44 Crore ($564.8 million), up from 1,522.27 Crore ($205.4 million). The airline noted that while operating expenses outpaced expectations, it managed to maintain a net cash-positive position due to rising revenues.

Chief Financial Officer Ankur Goel defended the results, stating, “The foundational years of any airline are dedicated to investing in its people, fleet, training, operating infrastructure, and network, and hence no airline registers P&L profits in these years.” He expressed optimism about Akasa Air’s future, highlighting that focusing on revenue growth, managing operational costs, improving yields, and expanding infrastructure will be critical to achieving profitability.

Goel emphasized that Akasa Air’s current performance reflects the typical growth trajectory of a new airline, noting that establishing market presence and expanding operations often requires several years to reach break-even. During FY24, Akasa Air tripled its capacity year-over-year, with revenue per Available Seat Kilometers (ASKs) increasing by 10%. However, current liabilities surpassed assets by 210.76 Crore ($28.3 million).

The airline operates a fleet of 26 Boeing 737s and runs over 110 daily flights across 63 routes to 28 destinations in five countries. According to the Directorate General of Civil Aviation (DGCA), Akasa Air holds approximately 4% to 5% of the Indian domestic market share.

Looking ahead, Akasa Air aims to raise $1 billion in debt and equity over the next three years to expand its fleet, with plans to add 200 new aircraft, including 99 Boeing 737 MAX 10s and 101 737-8-200s. Currently, the Jhunjhunwala family holds a 40% stake in the airline, while co-founder and CEO Vinay Dube owns around 25%. Reports indicate that a consortium led by Premji Invest and Claypond Capital is seeking to invest about $125 million in Akasa Air.

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