Summary
- Akasa Air is reportedly seeking additional funding of up to $400 million to increase its value from $650 million to $1 billion.
- Per the current shareholding structure of Akasa Air, the late Rakesh Jhunjhunwala’s family holds the largest stake at 45.97%.
- Despite ongoing issues with pilot shortages and legal disputes, Akasa Air remains confident about its future and plans to launch international flights by the end of the year.
Indian low-cost carrier Akasa Air is looking for more investment that could change its current shareholding structure. The airline has been in the news lately following a mass exodus of its pilots, leading to operational disruption in the last few weeks. But the latest report suggests that its financial planning for the future remains intact.
Raising more money
Budget airline Akasa Air could raise as much as $400 million in another round of funding. Mint reports that people aware of the matter have said that the fundraising will happen in multiple tranches and will increase the company’s value from $650 million to $1 billion.
Photo: Yatrik Sheth/Shutterstock
Akasa Air is currently involved in a legal dispute with some of its pilots who left the company without serving their notice periods and causing disruption in operations. However, the latest reports suggest that the airline is still very much in the game despite fears of operational shutdown.
Current shareholding
According to Mint, Akasa Air’s co-founder and chief executive officer, Vinay Dube, commands a 16.13% stake in the airline, Madhav Bhatkuly owns 9.41%, Sanjay Dube and Niraj Dube each has 7.59%, PAR Capital Ventures Llc, 6.37%; Kartik Verma, 1.93%; Ninan Chacho, 1.07%; remaining stakeholders, 3.94%.
Photo: Akasa Air
The biggest chunk of the company is owned by the family of the late Rakesh Jhunjhunwala, with a 45.97% share. Those in the know have said that the Jhunjhunwala family is unlikely to buy any more shares and could see its equity getting diluted. While the airline did not comment on the issue, it remains confident of its overall finances. Mint quotes its spokesperson as saying,
“We are confident about our future and continue to invest prudently. 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 a young airline, we are proud that we are adding to the company reserves even in the first year of our operations.”
Ongoing issues with pilots
The report of Akasa’s attempt to raise more cash comes at a time when it is grappling with a pilot shortage, with several of its cockpit crew leaving for other airlines (mostly Air India Express).
The airline took around 40 pilots to court, asking for compensation in millions due to disruption in operations and damage to reputation. In the last few weeks, Akasa has had to cancel hundreds of flights. Calling the pilots’ actions illegal, unethical, and selfish, Akasa argued in court that the situation was severe and that further resignation could even force it to shut down.
Photo: Akasa Air
Meanwhile, the airline received the go-ahead from India’s aviation ministry to operate international flights and is looking to launch operations by the end of this year to destinations in the Middle East and Southeast Asia.
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Source: Mint