Both Akasa Air and Air India Express operate similar aircraft types, making it easier for pilots to switch between the two airlines.
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After an impressive year of growth, Akasa Air now faces turbulent times. The budget airline, backed by the late billionaire investor Rakesh Jhunjhunwala, had rapidly expanded its operations to become the fastest airline to amass a fleet of 20 aircraft, a requirement for international flights. However, despite this impressive fleet expansion, Akasa Air is currently grappling with a pilot shortage, which has led to operational challenges.
In recent weeks, Akasa saw a wave of pilot resignations. The airline then responded by filing lawsuits against some of these pilots for abruptly leaving without adhering to the required six-month notice period. Akasa argued that their sudden exit had resulted in numerous flight cancellations, leading to operational losses and damage to its reputation. More than 40 pilots resigned from the airline, and legal actions have been initiated against several of them.
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Akasa Air vs Air India Express
Most of the departed pilots reportedly accepted offers from Air India Express, which also operates Boeing 737 aircraft, according to a report by The Indian Express. In addition to demanding that these pilots fulfill their contractual notice periods, Akasa Air is also seeking substantial compensation from some of the pilots for loss of operational profits and harm to its reputation.
Air India Express gained significant financial strength following its acquisition by the Tata Group. Both Akasa Air and Air India Express operate similar aircraft types, making it easier for pilots to switch between the two airlines.
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Operational Challenges
Akasa Air’s legal team even conveyed to the Delhi High Court that the airline was in crisis due to the mass resignations and could potentially face closure due to the disruption caused by these sudden departures. They disclosed that the airline had to cancel nearly 600 flights in August and anticipated up to 700 more cancellations in September.
In August, Akasa Air’s market share decreased from 5.2% in July to 4.2%, pushing it below SpiceJet in the hierarchy of domestic carriers. It had previously overtaken SpiceJet’s market share in June and retained the lead in July.
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However, in a recent statement, Akasa Air’s CEO, Vinay Dube, reassured employees that the airline was not on the verge of closure. He emphasized the company’s strong financial position and its readiness to implement long-term growth plans. Dube also mentioned that the airline had a sufficient number of pilots in various stages of training to operate more than 30 aircraft.
Pilot Shortage Crisis
The root of Akasa Air’s pilot shortage issue lies in the intense competition for pilots in India’s booming aviation sector. While Akasa Air aims to establish itself in this lucrative market, well-established players like IndiGo and Tata group airlines are pursuing substantial fleet and network expansion strategies of their own.
The demand for experienced pilots in India is expected to soar in the coming years, potentially leading to a severe shortage. Smaller and newer airlines like Akasa Air may be more vulnerable to this shortage compared to larger airline groups.
The Legal Route
As of now, Akasa Air has initiated two legal cases related to the pilot resignations. The first case, filed in the Bombay High Court, seeks to compel pilots to fulfill their contractual notice periods before joining another airline. It also seeks compensation from pilots for operational losses and damage to the airline’s reputation. The airline has reportedly claimed up to approximately Rs 22 crore per pilot in damages.
The second case, in the Delhi High Court, involves the enforcement of rules set by the Directorate General of Civil Aviation (DGCA) in 2017, mandating notice periods of six months for first officers and one year for captains. The validity of these rules is currently under question, as some pilot unions have challenged them in court.
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Despite Akasa Air’s legal actions against the pilots, there are questions within the aviation community about the validity of the pilots’ contracts. Some allege that the airline unilaterally altered pilots’ salary structures in June, which could be seen as a breach of contract.
The CEO defended the decision to sue the pilots, characterizing it as “employee-centric” in support of the current workforce. He emphasized that these legal actions were taken because the abrupt departures had disrupted operations and disrespected the hard work of the airline’s current employees.
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Tough Competition
Akasa Air faces tough competition in India’s aviation sector, dominated by IndiGo and the Air India group. These major players have significant financial resources and expansive networks, making it challenging for smaller carriers like Akasa Air to attract and retain the talent they need for growth. With the Indian aviation industry set for substantial expansion, the competition for pilots is expected to intensify.
Currently, India has over 9,000 pilots for a fleet of around 700 planes. Over the next few years, the country may require nearly 2,000 additional pilots annually to match the expected fleet growth. However, the DGCA issues fewer than 1,000 commercial pilot licenses each year, and there is a particular shortage of experienced captains.
In conclusion, Akasa Air, despite its recent challenges, remains determined to weather the storm. The airline industry in India is poised for substantial growth, and Akasa Air is confident in its long-term plans and readiness to expand. The pilot shortage issue remains a significant concern, but the airline is taking steps to address it and maintain its position in the competitive market.
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