Akasa Air is raising around ₹1,100 crore from investment offices of Azim Premji and Dr Ranjan Pai, as well as funds managed by 360 ONE Asset to support its operations and prepare for growth.
The family of late Rakesh Jhunjhunwala, original investor in the airline, is also committing fresh funds.
Akasa Air announced the signing of investment agreements on Thursday. The airline did not disclose an investment figure and sources said around ₹1,100 crore is being raised through share sale. The investment will be subject to Competition Commission of India approval. New investors will get two board seats in the airline.
The airline said the funds raised will fuel Akasa Air’s path to becoming one of the top 30 airlines in the world by the end of this decade.
Shortcomings
Additionally, the fresh funds will also support its operations. The airline scaled up rapidly and inducted 20 aircraft in its first year of operations, but growth has slowed down since. Since August 2023, it has only added seven planes. Fewer plane inductions means less income from sale and lease back of aircraft. This also translates to higher expenses as the airline is not able to spread its costs.
In FY2024 the Akasa Air had reported a net loss of ₹1,670 crore. The airline had attributed the loss to investments and network expansion during its initial phase.
“These investment agreements will empower us to build on the future that every Akasian has envisioned – one that’s bright for each of us as well as for all of India, as we transform the way customers experience air travel,” Akasa Air founder and CEO Vinay Dube said.
“These strategic investments represent a pivotal milestone in our journey and ensure long-term financial stability, enabling us to continue building a sustainable, future-focused business. Akasa Air continues to be well-capitalised, and these investments allow us to secure enduring, sustainable growth, with a financial safeguard to weather any unexpected challenges, thus reinforcing our readiness for the future,” Akasa Air chief financial officer Ankur Goel said.