India’s aviation potential is highly underestimated; there’s a vast journey ahead of us: Akasa’s CCO, ET TravelWorld

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<p>Representative Image</p>
Representative Image

Delving into the intricate facets of India’s aviation industry, Akasa Air‘s Co-Founder & Chief Commercial Officer, Praveen Iyer talked all and more about the prospects of growth, challenges, and the pursuit of sustainable, customer-centric innovation. Emphasising India‘s proclivity to undervalue its vast potential, Iyer advocated for a paradigm shift in mindset, urging a recognition and harnessing of the nation’s exceptional capabilities and top-tier service in aviation.

Unprecedented growth trajectory post-Covid

Visibly, India’s aviation sector is charting a swift upward path, with domestic travel primarily leading in 2023. Iyer added that the aviation industry’s trajectory in India over the past year post-Covid stands as a critical point of analysis. As also highlighted by him, the recent statistics in India’s flights show a remarkable upswing, with just November 25 marking a record-breaking 4,67,000 passengers, highlighting a significant resurgence from the industry’s previous lows. This surge, said Iyer, signifies a substantial recovery.

“The visible infrastructure development sets the stage for a robust decade ahead. The growth story appears sustainable, unlike the unsustainable rapid growth witnessed in the past. We’re now seeing steady, consistent growth, demonstrated through network expansions by airlines, be it domestic or international,” he said.

“Unlike the unsustainable growth spurts witnessed in previous decades (such as between 2000-2010 or 2015-16, characterised by growth rates ranging from 25% to 40%), the current trend emphasises consistency,” he added.

Regulatory landscape, infrastructure development paving the way

The aviation landscape in India has seen an incredible evolution, particularly in terms of regulations and infrastructure, said Iyer. According to him, the strides made in infrastructure development have positioned India at the forefront globally.

“I would say we have better infra from anywhere in the world,” he commented, highlighting the impressive state of infrastructure such as Terminal 2 (T2) at Kempegowda International Airport and upcoming plans for Navi Mumbai and Delhi.

Emphasising the comprehensive nature of this growth, he further added, “It’s the overall infrastructure that we have built around travel and tourism, which is just phenomenal. This holistic approach has not only boosted major cities but also smaller towns, tier 2 & 3 cities, shaping up their infrastructure to cater to the increasing demand,” he shared.

However, he also emphasised India’s tendency to underestimate its potential, urging a realisation of the untapped market with only 6 per cent of the population having taken to the skies. India’s to underestimate its potential. “Our consistent flaw lies in underestimating ourselves. The exceptional caliber of world-class service we offer is truly remarkable, and this reflects in the influx of tourists. Take, for instance, the phenomenal 300 per cent surge in foreign tourist arrivals in J&K; it’s not a shocker at all,” he said.

“With a population exceeding 140 crores, only a fraction have embraced air travel. There’s immense untapped potential. This is barely touching the tip of the iceberg; there’s a vast journey ahead of us,” he asserted.

For India, sky’s the limit but there’s a long way to go. “We’re nowhere near where we supposed to be,” added Iyer.

Challenges & strategies

In the Indian airline industry, challenges are an inherent part of the journey. Yet, this is the essence of the aviation space, especially for airlines, said Iyer, adding that addressing these head-on has been the modus operandi for the airlines.

“Infrastructure hurdles, particularly the limitations faced in expanding capacity within constrained airports, have been formidable. However, the tides are turning, and we’re witnessing progress. Our industry is growing, and the need for increased capacity is evident where we, as a country, are looking at an eventual fleet size of 1300-1400 aircraft in future,” he said.

He was also happy to mention that the investments are pouring in to transform these challenges into opportunities. “While external challenges persist, such as the perpetual obstacle of fluctuating ATF (aviation turbine fuel) prices impacted by global geopolitical tensions like wars, we’ve maneuvered through these headwinds,” he said.

Mitigating these challenges has been a pivotal part, he added. Despite factors beyond control, like ATF prices, Iyer said that the industry has strategised to fortify the industry within the means. “Initiatives such as the ability to lease aircraft within the country are some ways we’ve embraced these challenges, turning them into opportunities for growth and stability.”

Airlines must facilitate passengers affected due to cancellations, delay as per DGCA norms: MoS

Airlines are free to charge air fares as per their operation viabilities subject to compliance to DGCA rules, MoS in the Ministry of Civil Aviation Dr V. K. Singh stated in a written reply to a question in Lok Sabha. But they must also comply with DGCA guidelines in case of cancellations and delays, he said. DGCA, on its part, keeps a check on regulations compliance by scheduled domestic airlines, he shared.

Technological advancements and sustainability

Technological innovation in aviation, especially in pricing, revenue management, and customer touchpoints, are pivotal focus too, said Iyer, speaking during the Fireside chat at Economic Times Travel & Tourism Conclave recently held in New Delhi.

When asked, Iyer said that today technology reigns supreme as the nerve centre of operations. “The focus primarily centers on pricing and revenue management, where significant investments in Machine Learning and AI by airlines predict and cater to consumer behaviour. These advancements extend far beyond mere airport infrastructure. Passengers now receive precise updates on gate allocations and baggage belt locations, enhancing the overall travel experience. These developments underline a larger commitment to customer-centric technological advancements, with each airline and newly constructed airport raising the bar in tech enablement,” he stated.

While innovations like facial recognition have long been implemented in some international airports, India is steadily progressing toward integrating similar initiatives, aiming for a seamlessly interconnected travel experience, he added.

Addressing sustainability is another crucial focus within the aviation industry, Iyer said.

“Initiatives at Akasa Airlines, for instance, include the procurement of highly fuel-efficient aircraft, boasting a 16% reduction in carbon emissions compared to other narrow-body aircraft. These steps contribute to a larger vision of environmental preservation. Emphasis on biofuel production and implementation is another significant stride, considering India’s elevated carbon emission status. Investments in eco-friendly airport infrastructures and sustainable practices, such as biodegradable meal packaging and crew uniforms, just as Akasa does, are visible markers of a commitment to greener practices,” he added.

“Sustainability begins at an individual level, the journey towards a more environmentally conscious aviation industry hinges on collective efforts to drive this agenda forward from within,” stated Iyer.

Akasa Air: the launch, competitive edge & plans for international routes

Akasa, India’s newest airline, launched its first commercial flight on August 7, 2022 to support the growing demand across India with the greenest and youngest fleet in the country.

The inception of Akasa Air stemmed from a collective vision shared among industry professionals, as per Iyer. “We together saw a window of opportunity when the pandemic allowed us time to strategise. This dedicated effort during a challenging period led to the conceptualisation of Akasa Air,” he shared.

The core driver behind Akasa Air’s establishment was the identification of substantial growth potential within specific income segments, he added. “We observed a consistent growth in the middle and higher middle-class income groups, which directly translates into increased disposable income and greater willingness to spend on travel,” he noted, adding that this guided the airline to project a robust trajectory for the next decade, despite the unforeseen disruptions caused by the pandemic in 2021.

When asked, Iyer shared that what sets Akasa Air apart was the collaborative effort of professionals aiming to pioneer innovation in the aviation sector, a trend they had predicted might be mirrored by others in the industry.

Their predictions surpassed initial estimations, and the airline pleasantly surprised with the overwhelming response, said Iyer. “We underestimated the potential for 2022-23 but we are extremely happy to note how things have panned out for Akasa,” he shared.

Celebrating the milestone of 20 aircraft, the airline now gears up to venture into international operations, already holding rights to key destinations like Doha, Kuwait, Jeddah, Riyadh, and Medina, Iyer shared.

Further, with the competition gaining ground in the aviation market, Akasa Air aims to distinguish itself through affordability, he added. He also highlighted the remarkable response received for the crew’s uniforms, particularly the sneakers, and the enterprise’s gender-neutral approach.

The airline also aims to secure a reputation for its punctuality, aspiring to be one of the most reliable carriers, not just in the country but globally, Iyer said.

Additionally, through “Pets on Akasa,” the airline provides the opportunity to bring your beloved pets along, either in the cabin or the cargo section. This initiative aligns with Akasa’s vision of fostering an all-embracing and compassionate travel atmosphere. Presently, Pets on Akasa service is accessible for domestic flights within India.

“Our aspiration is to forge an airline that people connect with, one that evokes positivity and satisfaction during travel,” he emphasised.

“Our future blueprint centers on creating an airline that embodies a feel-good factor and stands out for its reliability,” Iyer concluded.

Airlines set to earn 2.7% net profit margin on record revenues in 2024: IATA

Passenger revenues are expected to reach USD 717 billion in 2024, up 12 per cent from USD 642 billion in 2023. Revenue passenger kilometers (RPKs) growth is expected to be 9.8 per cent year on year. IATA stated that 4.7 billion people are expected to travel in 2024, a historic high that exceeds the pre-pandemic level of 4.5 billion in 2019.

  • Published On Dec 15, 2023 at 08:00 PM IST

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