After a dream run of nearly a year, Akasa Air appears to have hit a bit of turbulence. The fledgling budget carrier had been rapidly expanding its operations and network over the past year, which saw it becoming the fastest to get to a fleet of 20 aircraft, a prerequisite to mount international flights. While the fleet expansion has been impressive, Akasa Air, which was backed by the late billionaire investor Rakesh Jhunjhunwala, appears to be finding it hard to hold on to enough pilots to optimally operate its aircraft, at least for the time being.
Hit by a spate of resignations from pilots over the past few weeks, the airline recently sued some pilots for quitting abruptly without serving their regulation notice periods of six months. The carrier claimed that their sudden exit had led to numerous flight cancellations, resulting in operational losses and damage to its reputation. According to sources, over 40 pilots quit the airline in recent weeks and legal proceedings have been initiated against some of them.
Most of these pilots are understood to have accepted offers from Air India Express, which, like Akasa Air, operates Boeing 737 family of aircraft. Apart from seeking that these pilots be directed to serve the full notice period as mentioned in their contracts, the 13-month-old carrier has also sought crores of rupees in compensation from some of the pilots for loss of operational profits and damage to its reputation.
Akasa Air’s lawyers reportedly went to the extent of telling the Delhi High Court on Tuesday (September 19) that the airline was in crisis due to the pilots’ resignations, and might even shut down as a large number of flights are being affected due to the abrupt resignations. They reportedly informed the court that the airline was forced to cancel nearly 600 flights in August, and might be looking at up to 700 flight cancellations in September.
In August, Akasa Air’s market share (by passengers carried) declined to 4.2 per cent from July’s 5.2 per cent, pushing it below SpiceJet in the pecking order of domestic carriers. Akasa Air had overtaken SpiceJet in terms of market share in June and was ahead in July as well.
Late Tuesday, however, Akasa Air’s Chief Executive Officer Vinay Dube assured employees that the airline was not going to shut down as it is on a strong financial footing and is geared to implement long-term growth plans. Dube also told the employees that Akasa Air currently has enough pilots at various stages of training to operate over 30 aircraft.
At the heart of the headwinds affecting Akasa Air is the scramble for pilots in India. While the newbie airline is trying to carve space for itself in India’s booming civil aviation market, established players with deep pockets like IndiGo and the Tata group airlines are implementing significant fleet and network expansion plans of their own.
Air travel in India is soaring and is likely to rise significantly over the next few years, and demand for pilots, particularly experienced ones, is expected to skyrocket. Industry analysts foresee a severe shortage of experienced Indian pilots in the coming years, and smaller and newer airlines like Akasa Air could be relatively more vulnerable than large airline groups.
The Akasa court cases
As things stand, Akasa Air is understood to have filed two court cases. The first is in the Bombay High Court against the pilots who quit the airline without serving the regulation notice period of six months. In that case, the airline is seeking that the pilots must fully serve their notice period before joining another airline.
It is also seeking compensation from pilots for operational losses and damage to the airline’s reputation due to the flight disruptions caused by their abrupt exits. According to sources, Akasa Air has claimed up to around Rs 22 crore per pilot in damages.
The second case is before the Delhi High Court, in which the carrier has sought enforcement of the rules stipulated by the Directorate General of Civil Aviation (DGCA) in 2017 mandating notice periods of six months for first officers and one year for captains. There is currently a question mark on their validity as a few pilot unions had moved court against the rules, and the cases are pending before the Delhi High Court.
This is understood to be the reason why the DGCA has been loath to directly intervene and enforce its norms in cases of disagreements over notice periods, even though Akasa Air is reported to have sought the regulator’s as well as the aviation ministry’s intervention in the matter.
Even as Akasa Air has dragged the pilots to court, many in the community are questioning the validity of the pilots’ contracts with the airline, alleging that Akasa Air had in June unilaterally altered the pilots’ salary structure, which they see as a breach of contract.
Dube has defended Akasa Air’s decision to sue the pilots. In fact, he termed the decision as “employee-centric” with regard to the carrier’s current workforce. “Some people have questioned whether it is employee-centric to seek legal remedy against former employees. Since these acts have caused disruption and disrespect to the great work done by our current employees, the most employee-centric thing we can do is to remain fiercely protective of your future and the promise we have made to our customers,” Dube said late Tuesday in his e-mail to Akasa Air employees.
“After much deliberation, we have initiated legal remedy against this small set of pilots who have left without serving their mandatory contractual notice period. Their actions were not only in violation of their contract but also the country’s civil aviation regulation. Equally, this is deeply disrespectful to the hard work and utmost integrity that all of you have put in to build our wonderful airline,” Dube told employees.
Akasa’s captain crunch
With the domestic aviation sector turning into a duopoly of IndiGo and the Air India group, both of which have strong financial backing and large-scale networks, smaller and new players like Akasa Air could find it rather challenging to attract and retain the talent they require to grow and capture more of the third-largest and fastest-growing aviation market globally.
At a time when signs of pilot scarcity have begun to surface, smaller carriers are seen as particularly susceptible in the face of rising heat from the industry heavyweights.
Indian airlines, mainly IndiGo and Tata group carriers led by Air India, have nearly 1,500 aircraft on order, which are to be delivered over the next 10 years. Akasa Air is also looking to place a triple-digit aircraft order by the end of this year. This essentially means the country will need thousands of new pilots in that period.
For a standard narrow-body jet of the Airbus A320 family and Boeing 737 family, airlines need to have at least 12 pilots on average. For a wide-body aircraft, the number of pilots needed – captains plus first officers – is in the range of 20 to 30, depending on the range of the aircraft.
A steady supply of additional pilots to match new aircraft inductions is going to be a massive challenge. At the least, it could put additional pressure on the existing and slowly growing pool of pilots. And at the most, it could become a major impediment to airlines’ growth plans amid surging demand for air travel. And most certainly, the scramble for pilots among Indian carriers is only expected to intensify.
Currently, India is estimated to have over 9,000 pilots for a fleet of around 700 planes. Over the next few years, India might require close to 2,000 additional pilots a year to keep up with the expected pace of fleet expansion. But the DGCA currently issues less than 1,000 commercial pilot licenses a year. To make matters worse, the really acute shortage is foreseen for experienced pilots, or captains, who lead the crew and are in charge of the flight. It takes a few years for a pilot to be promoted to captain and the existing Indian airline ecosystem is estimated to produce less than 200 captains a year.
For Akasa Air, the biggest threat is from Air India Express, the low-cost airline of the Air India group, which now has significant financial muscle following the acquisition by the Tata group. With Air India Express and Akasa Air operating similar types of aircraft, it would be easier and quicker for either airline to onboard the other’s pilots. Among major Indian carriers, only Air India Express, Akasa Air, and SpiceJet operate Boeing 737 family jets. IndiGo, Air India, Vistara, and AIX Connect operate Airbus A320 family planes in the single-aisle jet segment.
In his recent e-mail to employees, the Akasa Air CEO described the issue of pilot shortage as something the airline industry “has faced for decades”, adding that the carrier is well-prepared for unforeseen circumstances and has adequate 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. We are poised to take delivery of additional aircraft in the remainder of this fiscal year and expand our domestic and international footprint. We also remain on track to announce a 3-digit aircraft order before the end of the year,” Dube told employees.
An Akasa Air passenger aircraft taxis on the tarmac at Chhatrapati Shivaji International Airport in Mumbai, India, May 2, 2023. (REUTERS/Francis Mascarenhas/File Photo) 
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