Billionaire investor Rakesh Jhunjhunwala-led Akasa Air, a brand of SNV Aviation, today announced that it has ordered a total of 72 MAX 737 airplanes from global aerospace company Boeing. A joint statement said the deal is valued at nearly $9 billion at list prices. Akasa Air's order includes two variants from the 737 MAX family, including the 737-8 and the high-capacity 737-8-200.
Akasa Air CEO Vinay Dube said: "We believe that the new 737 MAX airplane will support our aim of running not just a cost-efficient, reliable and affordable airline, but also an environmentally friendly company with the youngest and greenest fleet in the Indian skies."
Dube said India is one of the fastest-growing aviation markets in the world, with an unparalleled potential. "We are already witnessing a strong recovery in air travel, and we see decades of growth ahead of us. Akasa Air's core purpose is to help power India's growth engine and democratise air travel by creating an inclusive environment for all Indians regardless of their socio-economic or cultural backgrounds."
The statement said: "Providing the lowest seat-mile costs for a single-aisle airplane as well as high dispatch reliability and an enhanced passenger experience, the 737 MAX will ensure Akasa Air has a competitive edge in its dynamic home market."
Stan Deal, Boeing Commercial Airplanes president and CEO, said Akasa Air, which is an innovative airline focused on customer experience and environmental sustainability, has placed its trust in the 737 family to drive "affordable passenger service" in one of the world's fastest-growing aviation regions. "The 737 MAX, with its optimised performance, flexibility and capability, is the perfect airplane to establish Akasa Air in the Indian market and ensure it effectively grows its network."
Boeing 737 MAX planes
As per Boeing, the 737 MAX planes deliver superior efficiency, flexibility and reliability, while reducing fuel use and carbon emissions by at least 14 per cent, compared to airplanes it replaces. India's growing economy and expanding middle class will fuel strong demand for commercial flights, driving the need for over 2,200 new airplanes in South Asia, valued at nearly $320 billion over the next 20 years, according to Boeing's 2021 Commercial Market Outlook forecast.
Notably, Boeing's 737 Max planes were grounded across the world in March 2019 after two fatal mishaps within a gap of five months left 346 people dead. The decision to ground Max 737 by countries globally, coupled with the Covid-19 outbreak, hurt Boeing hard financially. In India, the aviation regulator had permitted the Boeing 737 Max planes to fly in August this year after a gap of around 30 months.
Akasa Air plans
SNV Aviation, that will fly under the brand name Akasa Air, has already received a No Objection Certificate (NoC) from the Ministry of Civil Aviation as it embarks its journey to offer airline services. Akasa Air plans to offer flights across India starting early 2022. It aims to be the nation's most "dependable, affordable, and greenest airline". The most astute investor of current times, Rakesh Jhunjhunwala, is betting big on India, which is the world's second-most populous country. India is hugely under-penetrated in air travel as about 8 per cent of India's population fly.
Jhunjhunwala will reportedly invest $35 million (nearly Rs 260 crore) for a 40 per cent stake in Akasa. His team includes, among others, former IndiGo President Aditya Ghosh and former Jet Airways CEO Vinay Dube, who will be CEO of Akasa Air and director of the holding company, SNV Aviation Private Limited.
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