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Explained: What does Akasa’s 72 aircraft order mean for Boeing?

For Boeing, which is reeling out from the 737 Max controversy, Akasa airline's order means regaining a part of its lost ground in India — the world’s third largest aviation market.

While the Boeing dominated the Indian market with Jet Airways, SpiceJet, Air India’s wide-bodied planes and Air India Express several years ago, it has ceded ground to its European rival Airbus. (Reuters/File Photo)

Rakesh Jhunjhunwala-backed SNV Aviation, which will operate a low-cost airline under Akasa brand, has placed an order for 72 Boeing 737-8 Max family of aircraft at list prices of $9 billion order, in what is set to pave the way for the new airline’s summer 2022 launch.

What is Akasa?

The airline is being launched by stock market investor Rakesh Jhunjhunwala, who will hold a 40 per cent stake in the company. Jhunjhunwala has onboarded aviation industry veterans such as former Jet Airways CEO Vinay Dube and ex-IndiGo President Aditya Ghosh to run the airline. While Dube is the CEO of the company, Ghosh is expected to be on the board as Jhunjhunwala’s nominee. The Mumbai-based investor will pump in $35 million.

What does the order mean for Akasa?

Akasa has followed the low-cost carrier model of ordering aircraft in bulk, which gets the customers a significant discount on list prices from OEMs like Boeing. While the two companies haven’t detailed when the deliveries on the planes will begin, Akasa has said that it plans to start flying across India by summer of 2022. Having planned capacity will also help the airline in acquiring slots at Indian airports.

What does the order mean for Boeing?

For Boeing, which is reeling out from the 737 Max controversy, the order means regaining a part of its lost ground in India — the world’s third largest aviation market. While the American plane-maker dominated the market with Jet Airways, SpiceJet, Air India’s wide-bodied planes and Air India Express several years ago, it has ceded ground to its European rival Airbus, which is set to deliver hundreds of aircraft to budget carriers IndiGo and GoAir, in addition to full-service carrier Vistara, which is building an Airbus narrow-bodied fleet. The Akasa order will see Boeing gain some share along with resuming Max deliveries to SpiceJet.

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First published on: 17-11-2021 at 12:22:01 pm
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