India’s startup budget carrier Akasa Air has cleared a major hurdle by bagging the no objection certificate (NOC) from the government. This gives the company the green signal to carry out all other necessary steps, and obtain further clearances and regulatory approvals before starting operations next year. Let’s find out more.
The all-important NOC
Having missed the previous deadline of August 15th, Akasa Air finally received the government’s nod on October 11th. The news comes after the airline’s CEO Vinay Dube was seen holding meetings with the Ministry of Civil Aviation joint secretary Usha Padhee in the recent past and the more recent meeting of Rakesh Jhunjhunwala with India’s PM Narendra Modi.
In an official statement, Dube said,
“We are extremely happy and grateful to the Ministry of Civil Aviation for their support and for the grant of the NOC. We will continue to work with the regulatory authorities on all additional compliances required to successfully launch Akasa Air.”
He further added,
“…Akasa Air will serve all Indians regardless of their socio-economic or cultural backgrounds with warmth, inclusiveness and respect. Because at the end of the day, it is these qualities that connect people and cultures and help Indians realise their dreams.”
The company has the backing of ace investor Rakesh Jhunjhunwala who has promised an investment of $35 million for a 40% stake. Par Capital Management – which has interests in US ULCC Sun Country Airlines – and Airbnb are also said to have backed the airline.
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Now that the Ministry of Civil Aviation has given the go-ahead to Akasa, it can apply for the all-important Air Operator’s Certificate (AOC) from the DGCA – India’s aviation regulatory body. The licensing process usually takes around six months and hopefully will be concluded before Akasa’s plans of launching operations in the summer of 2022.
Dube started out with much excitement earlier this year with his plans of a budget carrier. However, things mellowed down for a couple of months as the timeframe to obtain the government’s NOC had stretched a little longer than the company had hoped for. With NOC in its bag, Akasa will not waste any time to start the long licensing process with the DGCA.
There is also no official announcement about the type of aircraft Akasa will use when it starts operations. Commercial aircraft fall under the category of restricted goods in the country. Akasa is probably waiting for all the necessary certificates from the aviation ministry and the DGCA to announce any aircraft orders it may have placed. But has it placed an order yet?
While it was more or less assumed that Akasa would go for Boeing’s 737 MAX series, recent reports have suggested that Akasa’s discussions with Airbus are not entirely over. Airbus’ CCO Christian Scherer Spoke with the Press Trust of India (PTI), and when asked if Airbus plans to counter Boeing’s offer to Akasa, he replied,
“We are not in the business of countering offers but we are having conversations with Akasa. Of course, we do.”
When the PTI probed further about how far the negotiations have developed between Airbus and Akasa, Scherer replied,
“That is really private. What I can tell you is that when you start an airline in India, what is the benchmark you are looking at. It is pretty obvious, isn’t it? It is IndiGo and to some extent Go First and SpiceJet, but the big guy is IndiGo.”
Exciting times for Indian aviation
It’s remarkable to see such significant changes in the Indian aviation sector even as the last year and a half have been completely ruthless to airlines worldwide. The long saga of Air India’s privatization came to a nail-biting end just last week. With Akasa in the picture and Jet Airways also planning a resurrection, aviation enthusiasts have plenty to look forward to in 2022.
IndiGo still enjoys a comfortable lead in India, and it won’t be an easy task to dethrone the LCC. It’ll be interesting to see if all these recent developments prove to be genuine competition for IndiGo, something the carrier hasn’t really seen in a while.