The launch of two new airlines, Akasa and Jet Airways 2.0, early next year, is expected to have an immediate impact on air fares in certain sectors, though it is likely to disrupt the market only in the next two to three years when these airlines increase their scale, industry experts said.
SNV Aviation, which is backed by billionaire Rakesh Jhunjhunwala and will operate ultra-low-cost airline Akasa, has placed an order for 72 Boeing 737-8 Max aircraft for $9 billion, paving the way for the airline’s summer 2022 launch.
“Akasa is expected to disrupt the low-cost carrier market, which is led by IndiGo but only after reaching substantial scale. In the short term, the airline, which is well-funded, may cause a churn in top talent in the industry and impact air fares on certain sectors,” said a senior official with a Gurugram-based airline, who spoke on the condition of anonymity.
“Akasa’s entry may cause disruptions similar to the ones caused by Kingfisher Airways after its launch in 2005-06 when the market was dominated by full-service carriers,” the official said.
Jet Airways 2.0 is likely to launch by early next year, with its new promoters hoping to induct as many as 50 aircraft in the next three years.
“The pent-up demand will continue to grow and the new players entering the market will bring in more benefits and options to travellers,” said Nishant Pitti, CEO and co-founder of online travel company EaseMyTrip.com.
“The market will become more dynamic in terms of prices and offers that will further help in reaching the pre-pandemic level quickly,” he said.
It must, however, be noted that both Akasa and Jet Airways 2.0 will find it difficult to get prime slots at busy airports such as Mumbai immediately after their launch. This in turn may make it difficult for them to compete with incumbents on busy routes such as Mumbai-New Delhi.
…