'Don't have market share targets': Akasa Air's top executive on competition with IndiGo

Low-cost carrier Akasa Air's Chief Information Officer Anand Srinivasan believes there's a lot to learn from market leader and rival airline IndiGo as India's newest airline charts its growth trajectory. Srinivasan, in a session with Masters' Union business school, said Akasa Air was not particularly concerned about market share at present, and was instead focussing on getting operational processes right.
   
Citing the airline's previous orders of 76 aircraft, Srinivasan said Akasa Air's market share would depend on the fleet size in the next few years.

"How do we plan to increase [market share]? One of the things we look at is capacity share versus market share. You'll notice that for most airlines market share just closely follows capacity share. So, we don't have any kind of targets in terms of market share," he explained.

"We placed an order for 76 aircraft of which we have 20 delivered already. So, there's another 56 to be delivered over the next few years. Then you go back and say 'well, I'm going to have over a period of time about 175, 200 aircraft, that I'll be operating'. You just do the math, and say 'okay, how much market share is it going to give you?' That will be the market share we'll be operating."

Since Srinivasan's statement, the airline has ordered another 150 Boeing 737 MAX jetliners, which should take the fleet size to over 200 in the next few years.

Srinivasan also emphasised that demand was not a problem in India and there was a significant percentage of first-time travellers in the current market.
 
"If you look at aviation in India, it's a massively supply constraint market. I could put 3x the number of flights and there's demand. The problem is increasing supply is not easy because it's not just dependent on the players, it's also dependent on the infra, the airports, the government, a whole bunch of other things, and obviously capital," he said.

About competition being inevitable with India's largest airline IndiGo, Srinivasan said: "We are driving on the same track, matter of time before we run into each other. Indigo was the challenger at one point of time. Jet [Airways] was the incumbent, Kingfisher, IndiGo challenged it. They came in with a slightly different business model and credit to them [IndiGo], they've done a fantastic job."

"Being professionals, we've got a great amount of respect for what Indigo has done. At some point, we will go head to-head. Right now, we are the little pesky mosquito that they don't bother about. But, eventually we will get to a point where we will hopefully challenge them full on. But, the key thing again is that what Indigo did was stuck to basics, stuck to a business model professionally. They executed what they had set out to do to the tee."

IndiGo placed a massive order for 500 A320s with Airbus in 2023, and is planning to double its fleet size by 2030. Air India too, now with the Tata Group, placed an order of 470 aircraft from Boeing and Airbus in 2023.

Also Read: Akasa Air spreads wings, orders 150 Boeing 737 MAX aircraft

Also Read: 'Sahil Kataria, a toy shop owner in Delhi, was en route for honeymoon,' says report about man who assaulted IndiGo pilot