In a significant boost to India’s burgeoning aviation sector, Akasa Air, the country’s youngest low-cost carrier, has successfully closed a strategic investment round, raising approximately Rs 1,200 crore (equivalent to $125 million). This fresh infusion of capital comes from a consortium of high-profile investors, including Premji Invest, 360 ONE Asset Management, Claypond Capital, and the family office of Dr. Ranjan Pai. Notably, the Jhunjhunwala family, who have been cornerstone backers since the airline’s inception, have further increased their stake, underscoring their unwavering confidence in Akasa’s trajectory.
Founded in 2022 amid the post-pandemic recovery of the travel industry, Akasa Air has quickly carved out a niche for itself with its focus on customer-centric operations, reliability, and affordability. The airline, which commenced operations on August 7, 2022, with its inaugural flight between Mumbai and Ahmedabad, has grown exponentially in just three years. Today, it boasts a fleet of 30 Boeing 737 MAX aircraft and has ferried over 20 million passengers across domestic and emerging international routes. This funding round marks a pivotal milestone, enabling the carrier to accelerate its expansion plans at a time when India’s aviation market is witnessing unprecedented demand driven by rising middle-class aspirations and economic growth.
Vinay Dube, the Founder and CEO of Akasa Air, who brings decades of experience from stints at Delta Air Lines and Jet Airways, expressed profound gratitude to the investors in a recent statement. “We are thrilled to welcome our new investment partners to the Akasian family. Their confidence in our team reaffirms our vision and our ability to scale sustainably while keeping our customers and employees at the heart of everything we do,” Dube said. He reserved special thanks for the Jhunjhunwala family, noting, “We remain especially grateful to the Jhunjhunwala family for not just helping us take flight but for their continued belief in our dream to redefine air travel in India.” Dube also acknowledged the supportive role of the Ministry of Civil Aviation, crediting government policies for fostering an environment conducive to aviation growth.
The Jhunjhunwala family’s involvement harks back to the airline’s origins. The late Rakesh Jhunjhunwala, often dubbed India’s Warren Buffett for his astute investments, was a key architect in launching Akasa Air alongside Dube. His vision was to create a world-class airline that could compete with established players like IndiGo and Air India. Even after his passing in 2022, the family has continued to champion the venture, with this latest infusion signaling their long-term commitment. Industry observers see this as a vote of confidence not just in Akasa but in the resilience of India’s aviation ecosystem, which has rebounded strongly from the COVID-19 disruptions.
Delving into the investor lineup, Premji Invest stands out as a major player. Led by Azim Premji, the philanthropic arm of Wipro’s founder, the firm focuses on investments that align with social impact, with returns channeling into the Azim Premji Foundation’s initiatives in education and healthcare. Manoj Jaiswal, Partner at Premji Invest, commented on the partnership: “We are excited to partner with Akasa Air, India’s fastest-growing airline, as it builds a world-class carrier in one of the most dynamic aviation markets globally.” Similarly, 360 ONE Asset Management, formerly IIFL Wealth, brings expertise in high-net-worth investments, with Fund Manager Umesh Agrawal highlighting the “tremendous growth potential” in India’s skies. Claypond Capital, the family office of Dr. Ranjan Pai (known for his Manipal Education and Medical Group), adds another layer of strategic depth, with CIO Shyam Powar praising Akasa’s “passion and execution” in tapping into the sector’s opportunities.
This capital raise comes at a crucial juncture for Akasa Air. Financially, the airline has reported challenges typical of a startup in a capital-intensive industry. In FY25, it posted a standalone net loss of Rs 1,983 crore, an 18.7% increase from the previous year, attributed to rising costs in employee salaries, maintenance, airport fees, and foreign exchange fluctuations. However, a company spokesperson emphasized that Akasa remains “net cash positive” at the operating level, aligning with its foundational business plan. Revenue has shown robust growth, fueled by disciplined cost controls, improved unit profitability, and network expansion.
Operationally, Akasa has faced headwinds, including delays in aircraft deliveries from Boeing. Out of a massive order for 226 Boeing 737 MAX planes placed in phases – including a landmark 150-aircraft deal at the Wings India 2024 event – only 30 have been inducted so far. This has led to underutilized resources, such as pilots on payroll without sufficient flying hours, contributing to higher costs. Additionally, the airline has experienced some leadership transitions, with key executives like the Vice President of In-Flight Services departing in recent months. Despite these hurdles, Akasa’s on-time performance and customer satisfaction ratings remain competitive, often outpacing rivals in passenger feedback surveys.
Looking ahead, the fresh funds are earmarked for multiple strategic initiatives. Primarily, they will fuel fleet expansion and route enhancements, with a strong emphasis on international growth. Akasa recently announced its foray into Southeast Asia, commencing flights to Phuket in Thailand, and is laying the groundwork for further penetration into SAARC (South Asian Association for Regional Cooperation) and ASEAN (Association of Southeast Asian Nations) markets. Destinations like Bangkok, Kuala Lumpur, and Colombo are on the radar, aiming to capitalize on the surge in outbound tourism from India. Domestically, the airline plans to deepen its presence in Tier-2 and Tier-3 cities, connecting underserved regions and promoting regional economic development.
Dube’s ambition is bold: to propel Akasa into the league of the world’s top 30 airlines by the end of this decade. This aligns with India’s broader aviation goals under the UDAN (Ude Desh ka Aam Naagrik) scheme and the government’s push to make India a global aviation hub. With passenger traffic projected to double to 300 million annually by 2030, according to the International Air Transport Association (IATA), Akasa is positioning itself to capture a larger market share. The airline’s emphasis on technology – from AI-driven booking systems to sustainable practices like fuel-efficient operations – further sets it apart in an industry grappling with environmental concerns.
Industry analysts view this funding positively, amid a competitive landscape dominated by IndiGo’s market leadership and Air India’s revival under Tata Group. “Akasa’s ability to attract blue-chip investors like Premji Invest signals maturity and potential for profitability in the medium term,” says aviation expert Kapil Kaul from CAPA India. He adds that while losses are expected in the early years, Akasa’s low-cost model and focus on employee welfare could yield dividends as scale increases.
In the broader context, this development reflects the vibrancy of India’s startup ecosystem, where aviation – once seen as a high-risk domain – is drawing institutional capital. It also highlights the role of family offices and philanthropists in nurturing homegrown enterprises. As Akasa Air charts its course, the skies seem brighter, promising enhanced connectivity, job creation (the airline employs over 3,000 people), and a more inclusive air travel experience for millions of Indians.
This funding not only strengthens Akasa’s balance sheet but also reinforces its narrative as a resilient player born from vision and grit. With the Jhunjhunwala family’s steadfast support and new partners on board, Akasa Air is poised to redefine the contours of Indian aviation, one flight at a time.
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This strategic funding infusion is a resounding positive catalyst, empowering Akasa Air to conquer new horizons and solidify its position as a transformative force in India’s aviation landscape.
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