'Revamped Air India Under Tata Group To Be Real Challenge': IndiGo CEO
Akasa Air received the no-objection certificate (NOC) from the Ministry of Civil Aviation on Monday, backed by former IndiGo president Aditya Ghosh, ace investor Rakesh Jhunjhunwala, and former Jet Airways CEO Vinay Dube.
According to IndiGo CEO Ronojoy Dutta, a refurbished Air India under the Tata Group would be a significant challenge, while new carrier Akasa Air will be a considerably less competitive force for the next two three years. Akasa Air, which is backed by former IndiGo president Aditya Ghosh, ace investor Rakesh Jhunjhunwala and former Jet Airways CEO Vinay Dube, got the no-objection certificate (NOC) from the Ministry of Civil Aviation on Monday.
"Akasa is a far less competitive force for now or for the next two-three years. They will have to grow and grow slowly, get the slots, get the planes. They are not going to come out of the box, raring to go. There will be a slow build. "And against that, I think we have good defences. We are the lowest cost carrier. It will be tough for anyone to get their costs lower than us," Dutta said in a pre-recorded interview at an event organised by aviation consultancy firm CAPA.
Whatever numbers anyone looks at, "we are running a damn good airline" with very low costs and with a great network, he added. "In the middle of the COVID-19 pandemic, we opened nine new domestic stations," Dutta said.
"So, for a new entrant, it will be tougher to compete with us. But (new) Air India -- that is the real challenge for us," he added. On October 8, the government announced that Talace Private Limited, a wholly-owned subsidiary of Tata Sons, has beaten a consortium led by SpiceJet promoter Ajay Singh by offering ₹ 18,000 crores to win the bid to acquire debt-laden Air India.
Air India will be a formidable force under the Tata Group, according to Dutta, and IndiGo does not take it lightly. "They will be a great competitor on the international stage. On the domestic front, they now have three carriers: Vistara, AirAsia India, and Air India. As a result, they'll be a tough competitor. They are, in my opinion, a formidable force "He made a point.
IndiGo presently operates about 85% of its pre-Covid domestic flights and over 40% of its pre-Covid international flights, according to Dutta. "In the next 18 months or so, we are not expected to grow much. After that, we begin to expand "he explained.