Akasa Air, India’s youngest airline, is reportedly seeking additional capital to deal with higher operating costs attributed to geopolitical disruptions linked to the Iran–US conflict. Bloomberg and the Free Press Journal say the airline is looking to raise about ₹10.5 billion (around $110 million) or roughly ₹1,050 crore through a mix of equity and debt. Sources cited by both outlets indicate the airline has approached existing investors and additional potential backers for an equity raise estimated at about ₹800 crore, while discussions with state-run banks are aimed at securing at least about ₹250 crore in debt. The reporting links the funding need to disruptions that affect flights and increase aviation turbine fuel (ATF) costs, noting fuel is a major component of airline operating expenses. Akasa is also described as considering use of a government-backed credit support programme for airlines affected by the conflict, though the airline did not directly comment on specific fundraising plans. The reports add that Akasa has continued expanding operations since launching in August 2022, and it plans further capacity growth during the current financial year ending March 31, 2027.
Akasa Air seeks ₹1,050 crore funding amid rising costs from Iran-linked disruptions
Akasa Air, India’s youngest airline, is reportedly seeking additional capital to deal with higher operating costs attributed to geopolitical disruptions linked to the Iran–US conflict. Bloomberg and t...
- Akasa Air is reportedly seeking around ₹1,050 crore (about ₹10.5 billion) in funding.
- The funding plan involves a combination of equity (about ₹800 crore) and debt (about ₹250 crore).
- Sources say the airline is in talks with existing investors and additional new investors for the equity raise.
- It is also discussing loans with state-run banks, tied to a government-backed credit support programme for affected airlines.
- Rising aviation fuel costs and flight disruptions linked to the Iran conflict are cited as drivers of the airline’s increased financial pressure.
Akasa Air is looking to raise around ₹1,050 crore through a combination of equity and debt as India’s youngest airline seeks additional capital to manage financial pressures arising from geopolitical disruptions, including the Iran conflict.According to a report by Bloomberg, the airline has approached existing investors as well as two new investors to raise nearly ₹800 crore through equity. It is also in discussions with state-run banks to secure at least ₹250 crore in debt under a government-backed credit support programme for airlines affected by the conflict.Akasa Air, which began operations in August 2022 under SNV Aviation Pvt Ltd, had raised funds from investors in June last year based on market conditions that have since changed. Akasa Air Suspends Noida-Navi Mumbai Direct Flights Weeks After Launch The escalation between Iran and the US disrupted flight operations and pushed up aviation turbine fuel (ATF) prices, increasing costs for airlines.Fuel expenses account for nearly 40% of an airline’s operating costs, making crude oil price volatility a major challenge for carriers. The need for fresh capital highlights the wider pressure faced by the aviation sector, with several airlines seeking financial support amid a difficult operating environment.For the proposed equity raise, Akasa’s existing shareholders are expected to contribute around ₹500 crore, while the remaining amount will come from an Asian investor and an American investor, sources said.The airline did not directly comment on its fundraising plans but said it looked forward to using the government’s credit support scheme, where appropriate, to strengthen its growth strategy.SNV Aviation’s shareholders include Akasa founder and CEO Vinay Dube, the family of late billionaire investor Rakesh Jhunjhunwala, a private equity fund managed by 360 ONE Asset Management and other investors. Despite challenges caused by higher fuel prices and international disruptions, Akasa has continued expanding its operations. While overall industry capacity declined during March and April, the Mumbai-based carrier increased its flight operations compared with the previous year.The airline currently operates a fleet of 40 Boeing 737 MAX aircraft. It reported a 37% rise in operating revenue for the financial year ended March 31, supported by a 30% increase in capacity measured through available seat kilometres.Akasa has also announced plans to expand capacity by around 30% during the current financial year ending March 31, 2027, as it continues efforts to strengthen its position in India’s competitive aviation market.
2 hours agoAkasa Air is looking to raise 10.5 billion rupees ($110 million) through equity and debt, people familiar with the matter said, as India’s youngest airline seeks funds to overcome challenges brought on by the Iran war.
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