Akasa Air Places Order For 150 Boeing 737 Max Planes | NDTV Profit - video Dailymotion

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- #AkasaAir announces order of 150 Boeing 737 Max aircraft. - Aircraft delivery to take place between 2027 to 2032   Sajeet Manghat in conversation with CEO Vinay Dube.   Read: https://bit.ly/3tVMtld

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00:00 Hello and welcome to NDTV Profit. You're watching this special interaction with Vinay Dubey,

00:05 who is the founder and CEO of Akasa Air. The youngest airline in the Indian aviation market

00:11 has put an order of 150 Boeing aircraft and to discuss that I have with me Vinay Dubey.

00:17 Vinay, thank you for joining us on NDTV Profit. Give us some details about this

00:22 order that you have placed with Boeing for 150 aircraft.

00:26 Yeah, it's a very, very exciting time for us. It paves the way for our growth all the way through

00:33 the end of 2032 and with this order it puts us on a path to be by the turn of the decade one of the

00:40 top 30 largest airlines in the world. So very, very exciting time for us. It's 150 aircraft that

00:46 will deliver between mid-2027 and all the way through 2032 and we have an option between the

00:54 max 8 and the max 10 aircraft. This 150 aircraft, what is the size of the order which will be placed

01:02 with Boeing? If you look at it at list prices, it's an order that's over 20 billion US dollars

01:08 at list prices. Okay, give me a sense of what is the game plan that Akasa has because you had

01:15 ordered 72 aircrafts earlier, then followed by four and now you're doing 150 that takes the

01:20 total to 226. When are these existing orders going to come in? What is the kind of fleet

01:28 expansion plan that you have from 2024 onwards? Sure. So we've got 22 aircraft as we speak in

01:37 operation. We've got 54 more aircraft to be delivered on our two existing orders. These

01:46 52 aircraft will be delivered between now or 54 will be delivered between now and mid-2027.

01:53 So by mid-2027, we'll have a fleet size of about 76 aircraft. And then this third order of 150

02:00 aircraft will kick in at that particular point in time. And so by the turn of the century,

02:05 sorry, the turn of the decade, we expect to have a fleet size of over 200 aircraft. And that's the

02:14 reason I said that we expect by the turn of the decade to be one of the top 30 largest airlines.

02:20 You're barely 17 odd months into operation and what gives you this confidence of putting such

02:28 a huge order across to the airlines or the OEMs? How do you see the Indian aviation market growing?

02:38 Is the growth that we are seeing of 8 to 9% every year in terms of traffic is one of the reasons

02:44 for that? I think there are two distinct reasons for this. Two reasons that underlie our confidence.

02:51 One, of course, is the India story and the other one is the aircraft story. And to be very honest,

02:56 you know, for any airline to be successful, you have to have good factors in place.

03:01 The India story, as you said, you know, growing, I'd say double digits, not 8 to 9%,

03:07 but the air travel demand in India is growing at a much higher pace. And we'll grow at this

03:11 much higher pace for at least a decade, if not three decades. And that's based on our growth

03:19 in GDP, the size of our population, the growth in GDP per capita, urbanization,

03:25 the infrastructure development that the government is focused on. By any measure, any method,

03:30 we think that we're going to have lots of demand and we're going to have the infrastructure to

03:35 support the demand. That's one area that gives us a lot of confidence. But the other one also

03:40 is the ACATA plan where we have built our airlines, our soft structure, our service orientation,

03:47 the strength of our employees, which is what gives us confidence that we can actually execute

03:53 the same plan in an extremely vibrant and growing country. So we're very, very proud of what our

03:58 employees have been able to achieve up to this point. And we have every confidence in them and

04:03 the rest of the management team to be able to deliver to the strategic tenets that define

04:09 ACATA, which is service orientation, employee centricity, the pillars that we have.

04:16 You said by 2027, you're looking at a fleet size of 76 aircraft. Is there a market share

04:25 that you're looking at? What is the kind of market share? Because in the last few months,

04:30 your market share has been stable at 4, 4.5%. Where do you see the market share moving by 2027

04:38 when you scale it up to 76 aircraft? To be honest, we're not focused on market share.

04:45 And we don't forecast what our market share is going to be in 2027 with our 76 aircraft because

04:53 we don't know what the others are doing around us. And quite frankly, it's not relevant. And the

04:59 reason I say that is because if you look at some of the most profitable and consistently profitable

05:06 players in other parts of the world, are players that have 3 to 4% market share. So clearly,

05:13 with 76 aircraft, our market share is going to grow. But what it grows to, like I said,

05:18 is not relevant for us because we think we have by then the same size to be able to make our

05:24 consumers and customers very happy and to make our shareholders extremely happy as well.

05:32 To give an order of the size of 150 aircraft, you need to have a good balance sheet backing it up.

05:39 How are you capitalized with respect to the balance sheet? What kind of funding you will need

05:47 or will you be or you've already done it so that you can back up this 150 aircraft order?

05:54 Yeah, it's a wonderful question. And you're absolutely right. Because manufacturers

06:01 do not allow airlines to place orders with them unless they have a lot of confidence

06:06 in the financial strength of the airline. We've been saying for a long time now that we will

06:12 capitalize. We've been saying for a long time now that we'll cash flow positive. We've been saying

06:18 for a long time now that the initial capital that we got in large part thanks to the late

06:25 and great Mr. Gindarnwala, we haven't spent a rupee of that capital. That's still in cash because

06:29 we're cash flow positive. And we've also said for a while now that we've got the financial

06:35 wherewithal, the financial strength to be able to place this speeded aircraft order in each one of

06:41 the stations are coming to fruition. So I think we're well capitalized and I'm proud of what our

06:48 customers are doing. My question was, are you looking at an IPO going forward, coming to the

07:01 markets, listing yourself and raising further capital as you grow from here to maybe 2032,

07:09 because you've given guidance of 226 aircraft by 2032. So there is a long runway which you've

07:19 already set out for yourself. So when is it that you're planning to come into the capital markets

07:25 and list yourself? Yeah, so I think an IPO is certainly not a plan. It's a bit premature today.

07:37 I think we need a few more years before we can actually start seriously planning for an IPO.

07:44 So we're a little ways off. I just want to get an update on the Boeing inspection,

07:50 because of the FAA alert that happened. You also have Boeing aircraft 737 MAX.

07:57 Has all the inspections been done and all the aircrafts are safe to fly?

08:03 Yeah, 100%. Certainly, I can say this unequivocally. I'll also maybe provide a

08:11 little more clarification. The issue that is currently being faced is with the Boeing

08:16 invariant. We fly the MAX-8 variant. There have been no issues with this. We fly the standard

08:24 version. It's been in production for a long, long time. And there's been no FAA guidance or

08:29 restrictions on the MAX-8, which is the aircraft that we fly and we've been flying for a while.

08:34 And that's also been flown for a long time all over the world. So we've got a lot of confidence.

08:42 Vinay, you spoke about one of the pillars being the people and the service that you offer. Of late,

08:51 we have seen a lot of airlines coming in news for the wrong reason, the service qualities,

08:59 which are coming in from your competitors. How do you manage this kind of service quality,

09:06 given the fact that you're growing in a very big market and at a double digit where the traffic is

09:13 growing at a double digit, as you said, and you have to keep pace with the kind of service quality

09:18 that you have to give to the person or people who are traveling by your flight? Yeah, it's not about

09:26 ACASA. It's not about ACASA, I'm talking about the industry. But I just want to say, for us,

09:32 it's more about ACASA setting the industry standards as opposed to maintaining,

09:37 keeping pace with the industry standards. We are India's most on-time airline. If you look at

09:43 where we are in the four months, we were number one in November, we're number one in December.

09:50 And for half of the month that is gone by in January, we are India's most on-time airline

09:55 for January as well. If you look at the quality of food we offer, it's game-changing. A number of

10:00 our aircraft, as you had seen, we're moving that towards 100%. If you look at the warmth and

10:07 empathy of our flight attendants, or if you look at the customer-centric policies, like our tech

10:13 policies. So I hope you will find, our customers will find that ACASA is actually setting and

10:20 improving the standards of service quality and service reliability here in India. You're 100%

10:27 right. It's not easy to do when we're going as fast as we are. But we are, you know, we manage

10:34 that through really a monetary focus on the customer experience, and also an extensive use

10:40 of technology to help us achieve this. So it's a combination of focus, it's a combination of

10:46 technology, it's a combination of the dedication of our employees. Each and every one of them goes

10:52 above and beyond to be able to deliver this experience and reliability for our consumers.

10:59 And we're very proud of that. In fact, we're almost more proud of what they've been able to

11:03 achieve on the customer experience in these difficult months, you know, compared to our HR

11:10 orders on those days. Given your experience in this sector, where do you think other airlines

11:17 have faltered with respect to providing this kind of service? Is there a communication gap,

11:23 which is there, where they're not able to tell the flyers about what's happening on the ground

11:30 and being transparent? Look, to be very honest, it's not my place to be able to comment on,

11:37 you know, what airlines are doing and not doing. So I apologize, I'll take a pass on that question.

11:42 You know, I just reiterate that at ACASA, you know, we're focused just on ourselves.

11:46 We think that we've got a lot to focus on when it comes to delivering, you know,

11:54 the highest levels of service and the most reliable network. And really, that's what we're focused on.

12:00 Finally, you know, what we have seen is that many of the airlines have grown so fast,

12:05 primarily because other peers have, you know, either have to shut down or have to go for bankruptcy.

12:11 It's a growth, keeping pace with the service quality for the industry, means I know at ACASA,

12:19 you're focusing on that as one of the pillars, but for the industry as a whole, it's putting a big,

12:25 it's putting a bad name for the industry as well as another bad experience for the first-time

12:30 flyer who is using airlines. Well, again, you know, please don't ask me to comment on other

12:37 airlines because it's not my place. You know, what I can tell you is about ACASA as I have,

12:42 but you know, to be very honest, when it comes to growth, this is India's story.

12:48 And India needs good airlines, India has a need for good airlines. And we're an intrinsic part

12:56 of the fabric of the country and the foundation on which the economy grows. And we at ACASA are

13:03 incredibly proud to be part of this growing India. And our aircraft order of 150 and more recently,

13:11 226, really exemplifies what we think our future of our country holds for all of us.

13:18 Finally, you know, we are in the budget season. What do you expect from the government from a

13:23 policy point of view for the Indian aviation industry as a whole?

13:27 I would hope much of the same. And I see this with great optimism, because when we talk about

13:35 the theme, it is just this amazing focus that our government has had on the industry of

13:41 civil aviation under the leadership of the Honorable Minister of Civil Aviation. We've

13:46 had this incredible focus on infrastructure development, you know, number of airports

13:52 in India has been fantastic. Focus on digitalization, you know, very important

13:58 parts of the customer journey, digitalization is a very important aspect of the interaction

14:04 we have with the regulator. So my view is, this is going to continue. We've heard from

14:10 the Honorable Minister this morning, and we sincerely hope and we fully expect for it to

14:18 continue given what we heard this morning with great optimism. We think it's fantastic.

14:23 And do you think that there's some new policies that needs to come in for the aviation industry

14:30 as a whole, from a leasing point of view or from, you know, better financial viability of the

14:36 industry? I think nothing that we think the ministry and the regulator is not already focused

14:44 on. We've got a government and a minister that holds many roundtable sessions with various

14:54 constituents, airlines being one of them, they're extremely open to feedback. And so my view is

14:59 that they hear us and they're already working on a lot of the feedback that has been provided.

15:05 We're very, very happy with that. Vinay, it was a pleasure talking to you today. Thank you very

15:10 much for joining us on ATV Profit and congratulations on the 150 aircraft ordered to Boeing. Thank you.

15:16 Thanks. Thank you very much.

Akasa Air Places Order For 150 Boeing 737 Max Planes | NDTV Profit

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