Akasa Air, India’s youngest and rapidly growing airline, is facing challenges in securing traffic rights to the United Arab Emirates (UAE). This obstacle could delay its international expansion plans and limit its competitive potential. With financial backing and strong growth prospects, Akasa’s future depends on how regulatory hurdles are addressed.
Akasa Air’s Rapid Growth and Expansion
Fleet and Market Share Growth
Since its launch, Akasa Air has followed an ambitious growth strategy. The airline currently operates 27 Boeing 737 Max aircraft and has captured a 4.6% market share in 2024. Its CEO, Vinay Dube, highlights India’s booming economy as a major factor driving the airline’s growth.
Future Fleet Plans
Akasa Air has ordered 199 more aircraft to be delivered by 2032, ensuring sustained expansion. Despite supply-chain delays affecting deliveries, the airline remains optimistic about its long-term vision.
Financial Stability
The airline is well-funded, though it has not disclosed a specific profitability timeline. Reports suggest discussions for a $120 million capital infusion involving major investors like Azim Premji’s and Ranjan Pai’s family offices.
Upcoming Routes
Akasa plans to add 5-10 new destinations in the coming year, with a mix of domestic and international routes. However, expanding internationally has become a challenge due to difficulties in securing critical UAE flight rights.
Challenges in Securing UAE Flight Rights
Regulatory Hurdles and Unfair Competition
Akasa Air is facing difficulties in obtaining permission to operate flights to the UAE, specifically Abu Dhabi. The airline argues that the current route allocation system favors established players like IndiGo and Air India, creating an unfair competitive environment.
Voluntary Surrender of Other Routes
In anticipation of getting UAE rights, Akasa voluntarily surrendered its rights to fly to destinations like Hong Kong, Kenya, Egypt, Ethiopia, Bangladesh, and Nepal. However, despite repeated requests, the airline has not received approval for Abu Dhabi flights.
Request for Alternatives
In a formal letter to the Ministry of Civil Aviation, Akasa Air requested traffic rights for Abu Dhabi in the Winter 2024 or Summer 2025 schedules. If slots for Abu Dhabi remain unavailable, it asked for permission to operate flights to Sharjah instead.
Government’s Response to Akasa’s Concerns
During a consultative meeting on January 15, 2025, Akasa learned that Abu Dhabi flight slots had already been reallocated to other UAE destinations like Sharjah and Ras Al Khaimah. The government had given these rights to other airlines, leaving Akasa frustrated.
Traffic Rights Allocation Explained
A Civil Aviation Ministry official explained that the allocation of traffic rights is based on a 2014 Memorandum of Understanding (MoU) between India and the UAE. According to the MoU, only 2,500 seats per week are allocated to UAE destinations, excluding Dubai.
The ministry also cited concerns that Akasa does not have enough available aircraft to operate new flights immediately. They want to avoid a situation where rights are granted but flights are not launched, leaving passengers without benefits.
Current Situation and Future Outlook
Akasa Air has secured approval to start flights to Abu Dhabi from Ahmedabad and Bengaluru, with daily services beginning on March 1, 2025. The airline already operates a daily flight to Abu Dhabi from Mumbai. However, Akasa’s broader international expansion depends on overcoming regulatory challenges.
Will Akasa Air Overcome the Hurdles?
Akasa Air’s aggressive growth strategy, strong financial backing, and commitment to international expansion make it a significant player in India’s aviation sector. However, its ability to compete globally depends on how the government addresses concerns about fair competition and route allocations.
Without intervention, the current dominance of IndiGo and Tata Group airlines like Air India could create a duopoly, limiting affordable travel options for passengers. Akasa’s success or failure in securing UAE rights will serve as a test of India’s aviation policies and their support for new entrants.
For now, Akasa is poised to operate new routes, but the larger question remains: will regulatory changes allow it to expand further, or will it remain restricted by policies favoring established airlines?