Akasa Air is planning to raise around ₹1,050 crore ($110 million) through a combination of equity and debt as the airline looks to strengthen its financial position and continue its expansion plans amid challenges caused by the Iran conflict and rising operational costs.
The Mumbai-based airline has approached existing investors as well as two new investors to raise around ₹800 crore through equity, according to people familiar with the matter. The airline is also in discussions with state-run banks to secure at least ₹250 crore in debt under the government’s credit support programme for airlines affected by the conflict.
The fundraising discussions come at a time when the aviation industry has faced increased pressure due to flight disruptions and higher jet fuel prices following the Iran war. Aviation turbine fuel accounts for nearly 40% of an airline’s operating expenses, making fuel price volatility a major challenge for carriers.
Existing Investors to Participate in Equity Raise
For the equity component, Akasa Air’s existing shareholders are expected to contribute around ₹500 crore, while the remaining amount could come from an Asian investor and an American investor.
Akasa Air, operated by SNV Aviation Pvt., did not directly comment on the fundraising discussions but said it is looking to utilise the government’s credit support scheme “as appropriate” to strengthen its growth plans.
The airline’s shareholders include founder and CEO Vinay Dube, the family of late billionaire investor Rakesh Jhunjhunwala, private equity fund managed by 360 ONE Asset Management and other investors.
Iran War Adds Pressure on Global Airlines
The additional capital requirement highlights the wider financial pressure faced by airlines worldwide due to geopolitical uncertainty, fuel price increases and operational disruptions.
Air India, owned by the Tata Group, recently reported significant losses and is seeking additional funds from its promoters, including Singapore Airlines. Meanwhile, SpiceJet is also reportedly exploring additional borrowing under the government’s airline support programme.
Akasa Continues Expansion Despite Headwinds
Despite industry challenges, Akasa Air has emerged as one of India’s fastest-growing airlines. While overall domestic airline capacity declined in March and April, Akasa increased its flight operations by 13.2% compared with the previous year.
The airline currently operates a fleet of 40 Boeing 737 MAX aircraft and has continued expanding its network since launching operations in August 2022.
Akasa Air reported a 37% increase in operating revenue for the financial year ended March 31, supported by a 30% rise in available seat capacity.
The airline has also announced plans to increase its capacity by around 30% during the current financial year ending March 2027.
Funding to Support Long-Term Growth
The planned fundraising is expected to provide Akasa Air with additional financial strength as it scales operations, adds capacity and competes in India’s rapidly expanding aviation market.
With rising passenger demand, fleet expansion and increasing competition among domestic carriers, the airline is focusing on maintaining growth momentum while managing cost pressures caused by global uncertainties.
