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Can the sudden exit of 43 pilots shut down Akasa Air?

Akasa Air commenced operations in August 2022, has been able to build a fleet of 20 aircraft within a year
Akasa Air commenced operations in August 2022, has been able to build a fleet of 20 aircraft within a year

Summary

  • The airline had reportedly said that the abrupt departure may even cause a shutdown. Mint spoke to Akasa and industry experts for a deep-dive perspective

New Delhi: One-year old Akasa Air is the strongest airline in India today in terms of potential for capacity expansion. However, the last one month has been troublesome for the carrier due to the sudden exit of 43 pilots, resulting in cancellation of flights leading and decline in market share.

In the legal battle against pilots, the airline reportedly said that an abrupt departure of pilots disrupt operations at an airline and can lead to a shutdown.

Not Shutting Down

In an email to its employees, the airline said reports of a shutdown are “speculative." In a response to Mint’s queries, the airline clarified that while it had to endure last-minute flight cancellations during July and August due to pilots leaving without serving the mandatory notice period, it has made changes over the last 30 days to rationalise its operations.

“In the last thirty days we have rationalized our network to ensure that we offer our customers the highest levels of operational reliability, as we did for the first 11 months of our operation. In the last thirty days we have also added more line available pilots to our system allowing us to increase the level of our operations once again in a phased manner," the airline’s spokesperson told Mint.

Akasa, which commenced operations in August 2022, has been able to build a fleet of 20 aircraft within a year and the civil aviation regulator has also approved the airline’s request to apply for international flight operations. At this juncture, any shortage in terms of pilots can impact the airline’s international plans. The airline, however, says that it has “enough" pilots to drive its growth but reiterates that pilot discipline is key in a market like India which suffers from shortage of senior pilots.

“As a team of planners, we are prepared for unforeseen circumstances and have contingency management strategies in place. In that regard, we have a ten-year plan that covers pilot recruitment, training and career upgrades. In fact, as of today we have enough pilots at various phases of their training to fly over 30 aircraft," the spokesperson further said.

Market Share Fall

The airline witnessed a fall in its punctuality and market share due to the sudden exit of its pilots who left without serving the six-month notice period. Its market share in domestic aviation dropped to 4.2% in August from 5.2% in July. Its on-time performance fell to 80-81% in July-August from over 87% earlier.

The airline has called these “short-term constraints."

“Our commitment to be reliable remains sacrosanct – this means that we have chosen to fly less and give up market share in the short term to offer a more reliable network to our customers. Please be assured though, that these are only short-term constraints," the spokesperson told Mint.

Pilot Discipline

While the airline has said that it has enough pilots and has rationalised its network as per its current pilot strength, the airline is keen to bring the attention of stakeholders to the issue of shortage of pilots and to the need of pilots.

To that effect, it has filed a case in the Bombay High Court against the pilots seeking 21.6 crore in compensation. In addition, it has approached the DGCA and agreed with them to request the High Court of Delhi to pass orders for implementing the interim order in relation to mandatory contract notice period requirements by pilots.

“Process and discipline is essential to this ecosystem that needs trained, experienced personnel to ensure safety and longevity of the entire operations. A shortage of pilots is an issue that the airline industry has faced for decade," the spokesperson added.

Industry Feedback

Industry insiders say that the shutdown of an airline has more to do with structural issues related to the working style of a company rather than issues related to unavailability of some pilots. “Unless over 50% of pilot strength of an airline suddenly exits from an airline, these issues are often cyclical and tends to happen whenever there is aggressive competition in the industry," a senior executive said.

"In its current form, Akasa Air presents potential with the backing of Rare Enterprises, a company owned by the Jhunjhunwala family and led by industry veterans like Vinay Dube and Aditya Ghosh. I think this legal move by Akasa has more to do with setting things straight to ensure that such situations are not repeated in the future as it moves forward in a market where Air India and IndiGo both will need a lot of pilots for nearly 1,800 aircraft that they have on order," another executive added.

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