Akasa Air took to the skies in August 2022 and has since been recognised as one of the most on-time carriers. Founder & CEO Vinay Dube has been instrumental in steering Akasa through its formative years, building a fast-growing brand in this highly competitive sector. In the inaugural edition of Business Today MindRush PODS, Dube sat down for an exclusive chat with Sanjeev Krishan, Chairperson of PwC in India, and Siddharth Zarabi, Editor, Business Today. Edited excerpts:
Siddharth Zarabi: India’s aviation sector has witnessed some pivotal moments in the recent past. How important is this period?
Vinay Dube: India’s economic engine is going to define India’s aviation sector for decades to come. And that has nothing to do with one airline or the other. Think about a country of 1.4 billion people flying on [around] 600 aircraft today [while] in the US, 350 million people fly [in] 7,500 aircraft… It’s not that India is a small country. We are not the size of Belgium where the mode of transportation is something completely different… And so, aviation is going to grow by double digits for the next 30 years… What’s so exciting about aviation is that you’ve got this amazing growth ahead of you. I don’t look at aviation in India on the back of one week or one day. I look at it on the back of years. And that’s the exciting part.
SZ: Sanjeev, do you agree with Vinay that aviation will continue to be a massive growth driver in India?
Sanjeev Krishan: We are aspiring to be the third largest global economy. In terms of purchasing power, we already are the third largest. And if we look at what has been said in terms of India’s aspiration from a GDP standpoint, $35 trillion by 2047, the next 20 years will define how India captures the imagination of the world. And that will cause significant opportunities for the aviation sector. As India becomes more aspirational, a lot of that will mean that a lot of Indians are flying. I completely agree with the comparison that Vinay made in terms of per capita utilisation with the US. India has a lot to achieve. I believe that in the next 20 years… Indian consumerism will rise and there will be significant opportunities for businesses like aviation.
SZ: The price difference between an air ticket and a first-class train ticket has come down significantly... Is that the future of aviation pricing?
VD: Hats off to the Indian airlines for being one of the most efficient in the world! If you look at the cost structure that we have created in India, it is on par or better than some of the finest airlines in any other part of the world… And this happens because we’ve got some of the finest aviation lines in this country creating cost structures that are as affordable.
I think you’re going to see growth, but you’re going to see stability in aviation as you have a different genre of airlines today. You have airlines that are professionally managed... airlines that are well capitalised. Today, airlines don’t have the cost structure that separated one from another... I think that’s going to breed stability. I look at the next decade as one that has stability, but I look at the efficiency that’s been created and engineered into India’s airlines to be great for consumers. You’ll continue to have some of the best prices in India compared to any other part of the world.
SK: Aviation is a capital-intensive business, and that might put off some potential entrepreneurs. How do you look at the landscape and what would you suggest to someone who wishes to enter the space?
VD: What has happened in Indian aviation is a mirror image of what’s happened in US or European aviation. Nothing about that history troubles me… In the US, TWA and Pan Am were household names. And then you had the likes of American Airlines, Delta, United, and Continental that bankrupted these massive, well-run airlines. And then the likes of Southwest came in as low-cost carriers and bankrupted these airlines. And now, through consolidation and restructuring of costs, you’ve got stability and profitability for a decade. This is exactly the way Indian aviation has played out. Because we have entered this era where we’ve got consolidation, restructuring of some of the airlines, [and] professional management. I’m very excited that this is going to be stable and great for airlines [in the] long term.
For entrepreneurs looking to get into aviation, I would welcome them. But this is not one for the faint-hearted. You can’t look at aviation in terms of quarters. You’ve got to look at aviation in terms of years.
SZ: What was the thought behind setting up Akasa and what did it mean for all those who decided to back this dream?
VD: Akasa was founded on very simple principles. The fundamentals were that India is incredibly underpenetrated as far as aviation is concerned, with this hard to fathom, unimaginable growth ahead. Yet, we had [only] one or two professionally managed airlines. Having spent 27 years in US aviation, it was surprising for me to see that in this country of 1.4 billion people. For me, this was a no-brainer that there’s a spot here for us to create a third airline that has this massive runway. The only thing was, is this the right time? And there was no better time than Covid to start an airline.... We had availability of aircraft, of highly qualified people, and airports and slots and a slew of other things. There’s no other moment in our history when you had that kind of availability, and all you’d have to believe was that the world and the human race would overcome Covid.
SK: Honestly, I think it takes some amount of entrepreneurial spirit to start off during Covid. It takes courage and conviction. Clearly the opportunity was there. The under-penetration was visible. The relative lack of competition was also there. It still took somebody to have the conviction and the capital to start something.
SZ: How has the infrastructure focus of the government helped?
VD: If it were not for policy changes and policy execution and infrastructure investment, I don’t think many dreams could be enabled… You can’t land a plane without a runway. You need to build runways, terminal capacity, air traffic management capabilities...
Some of the most discouraging things that I heard were, ‘Vinay, you don’t know anybody.’ ‘You’re a professional.’ ‘You’ll never get a licence.’ ‘You’re too naïve.’ ‘India doesn’t work like this. You’ve been operating in the US for 27 years. What do you know?’
The fact is that we got our licence in less than two years from inception… Where in the world do you have the efficiency to provide an aviation licence and get aircraft in the air from inception, in less than two years? I want to also [give a] shout out to the efficiency of the bureaucracy and their support, and government policies that are not just associated with brick and mortar and runways and terminal buildings, but even the policies that allowed us to get our licence-without compromising on safety and without knowing anyone.
SZ: What is the impact on the overall aviation ecosystem on account of this kind of policy framework of the Narendra Modi government?
SK: The big difference that I see over the past 8-9 years in particular has been the confidence that consistent policy has created in the minds of entrepreneurs. When you look at the various reforms, the formalisation of the economy... these steps have created a lot of confidence in entrepreneurs within India, capital providers from India and overseas. The fact that they are coming together is creating this perfect situation that both can coexist, both can be certain of the other… To me that is the most encouraging part.
VD: To give you a sense of the change, Akasa launched its first international flight in March 2024... Never in the history of Indian aviation has an airline launched an international sector within 18 months [of starting operations]... There was very specific policy change that enabled that. Today, we fly to Doha, Kuwait, Jeddah, Riyadh and Abu Dhabi. And we’re thinking of many other international destinations in Southeast Asia and Africa. There’s policy change that has allowed this kind of growth.
SZ: How would India’s aviation and airlines benefit from the Jewar airport?
VD: Let me respond not just on Jewar but also on other airports in general... Let me also talk about transportation and how important it is in facilitating a country’s/ city’s/state’s growth. And the reason I say transportation is because it applies to highway infrastructure, local transportation… to any form of transportation. Without transportation, you can’t have the kind of economic growth that you want. Whether it’s Jewar or Navi Mumbai, it’s not just the benefit to airlines… it’s going to benefit consumers, businesses, and enable India’s economic engine. Singapore built its entire economy on the back of Singapore Airlines. Dubai has built its economy on the backs of Emirates… States and countries are built on the back of strong transportation infrastructure of every kind. And that’s the beauty of the investments that are being made in airports today.
SK: Any kind of infrastructure development is not only necessary, but critical for inclusive development of India. The UDAN scheme is encouraging aspirational India. I think it is going to create a huge amount of development and local employment.
SZ: Rakesh Jhunjhunwala had the knack to pick winners and invested in you. How did that come about?
VD: The late, great Rakesh Jhunjunwala was an amazing human being. We were introduced by somebody else. It took only a short amount of time to convince him that this was a good investment because he was very intuitive… It didn’t take him long to believe that this was the right time to start the airline because he believed in the India growth story more than anyone. And the rest is history.
Treating our employees with dignity and respect and making sure that we build an employee-centric company was important to him. Making sure that while we focussed on our cost structure, we didn’t lose sight of empathy with our customers. And this is sort of the ethos with which we live.
SZ: Jhunjhunwala was also someone who was very focussed on the bottom line? Did you have any discussions on a future listing?
VD: Not prominently. The reason is as you know, Rakesh was a long-term investor... Does anyone think about when we will list the company and take it public? Yes, because, having a publicly listed company gives you access to pools of capital that allow you to do bigger and greater things… but that was not anywhere near the central elements of our conversation. Our focus is to get the fundamentals right and make sure we have an on-time and reliable airline.
SZ: How do you achieve this?
VD: By focussing on the fundamentals. First, you say clearly to our 4,500-plus employees that we will be India’s most on-time airline, because without them, you can’t achieve it… In aviation, you need everyone humming and pointed in the right direction. 
@szarabi
