Pilot resignations leave Akasa Air in ‘state of crisis’; CEO says airline is well-run with strong finances

September 21, 2023

Amid headwinds, Akasa Air on Wednesday said it is a well-run airline with strong finances, a day after telling the Delhi High Court that it is in a “state of crisis” as abrupt resignations of more than 40 pilots have led to multiple flight cancellations.

“I urge you not to be alarmed or distracted by media headlines, especially those that are speculative and claim that the airline will shut down. We are never more confident about our future and continue to invest prudently, with longer-term financial success in focus,” Akasa Air Founder and CEO Vinay Dube told the staff on Wednesday.

Amid the fledgling airline moving high courts in Delhi and Mumbai in relation to the issue of resignation of pilots without serving their notice periods, Dube also asserted that shortage of pilots is an issue that the airline industry has faced for decades and said that it has 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,” he said.

On Tuesday, the airline told the Delhi High Court that it is in a “state of crisis” following the “sudden and abrupt” resignation of over 40 pilots who left the airline without serving the mandatory notice period.

SNV Aviation Private Limited, which flies under the brand name Akasa Air, has sought direction to the DGCA to “take coercive action against pilots who fail to comply with the mandatory notice period requirements, in terms of the Civil Aviation Requirement (CAR)…”.

The high court has fixed the airline’s plea for hearing on Friday.

The high court also sought to know from the Directorate General of Civil Aviation (DGCA), represented by advocate Anjana Gosain, as to what action it takes in case flights have to be cancelled due to pilots’ resignation.

On Wednesday, Dube emphasised that Akasa Air is a well-run airline with strong finances and a solid plan, as much for growth as it is for contingencies.

In its plea, the airline said its officials met DGCA representatives several times to explain their difficulties but failed to receive any response or assurance from the authorities after which it gave a representation to the Minister of Civil Aviation.

The petition said the DGCA’s inaction in the face of the crisis is at odds with its statutory duty to act in public interest.

According to Dube, when a small set of pilots abandoned their duties and left without serving their mandatory contractual notice period, it forced a disruption of flights between July and September, necessitating last-minute cancellations.

In the last thirty days, the airline rationalised its network and that it chose to fly less and give up market share in the short term.

Akasa Air’s domestic market share declined to 4.2 per cent in August from 5.2 per cent in July as pilot shortage led to cancellation of many flights last month. The carrier flew just 5.27 lakh passengers last month whereas it ferried 6.42 lakh people in July.

“The airline… has generated cash from its first day of operations as a result of which the initial investment by our investors (including the investment made by Mr Jhunjhunwala) continues to remain secure in our bank account… as an airline, we are adding to the company reserves even in the first year of our operations,” he noted.

Rakesh Jhunjhunwala, who backed Akasa Air, passed away soon after the airline commenced operations on August 7, 2022.

After much deliberation, Dube said the airline initiated legal remedy against the small set of pilots who have left without serving their mandatory contractual notice period and that their actions were not only in violation of their contract but also the country’s civil aviation regulation.

In a statement, Akasa Air said it has approached the Bombay High Court to obtain a stay against a small set of pilots who abruptly resigned and abandoned their positions without serving their mandatory six-month notice period.

“Given the acts of these pilots resulted in immense passenger inconvenience, Akasa Air approached the DGCA and agreed with them to request the Hon’ble High Court of Delhi to pass orders for implementing the interim order in relation to the Civil Aviation Requirement (CAR) dated 16.08.2017 governing compliance of mandatory contract notice period requirements by pilots,” it added.

The airline, which started flying in August last year and currently has a fleet of 20 aircraft, has received approval from the civil aviation ministry for starting international flights and the first overseas flight is likely by year-end.

The airline is targeting destinations within the range of a Boeing 737 MAX from India in South Asia, Southeast Asia and the Middle East, Dube said in a statement.

While the country’s aviation space is growing, some airlines are facing turbulence. Faced with Pratt & Whitney (P&W) engine issues, budget carrier Go First suspended operations in May and currently undergoing an insolvency resolution process while SpiceJet is grappling with financial headwinds.

Jet Airways, which shuttered operations in April 2019, is still to restart flying as differences persist between Jalan Kalrock Consortium, the winning bidder under the insolvency resolution process, and the carrier’s lenders.

IndiGo and Air India group are expanding their network and operations.

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