On Nov. 16, India’s Akasa Air made an order for 72 Boeing 737 MAX jets worth over $9 billion at list prices, a transaction that will continue to help the manufacturer reclaim lost ground in one of the world’s most promising markets.

According to the announcement by Boeing, Akasa Air has purchased two variants of the 737 MAX family, the 737-8 and the high-capacity 737-8-200. The Mumbai-based carrier would begin receiving the jets in mid-2022. The Akasa Air directive came months after the Directorate General of Civil Aviation (DGCA) cleared airlines to fly the MAX plane, putting an end to almost two and a half years of regulatory grounding following two tragic crashes in five months that killed 346 people.

Akasa Air, which is owned by billionaire investor Rakesh Jhunjhunwala, dubbed “India’s Warren Buffett,” has joined forces with former chief executives of IndiGo, the country’s largest carrier, and Jet Airways to capitalize on domestic air travel demand, which is approaching pre-pandemic levels as the country recovers from a devastating outbreak earlier this year.

The civil aviation ministry gave the low-cost airline preliminary approval to begin operations in October, and it is anticipated to begin flying next year.

Long Term Engine Deal

Just a day after its purchase with Boeing, the carrrier also struck a deal with CFM International for its LEAP-1B engines, worth approximately $4.5 billion at list price, to power the 737 MAX planes it had recently purchased.

The agreement also includes spare engines and long-term servicing, according to a joint statement from the companies. The LEAP-1B engine entered service on the Boeing 737 MAX in 2017, and the firms said that over 2.5 million engine flight hours have been documented.

Both Views

“We are honored that Akasa Air has placed its trust in the 737 families to drive affordable passenger service in one of the world’s fastest-growing aviation regions,” Stan Deal, president and chief executive officer (CEO) of Boeing Commercial Airplanes, said in a statement.

“We are delighted to partner with Boeing for our first airplane order and thank them for their trust and confidence in Akasa Air’s business plan and leadership team,” Akasa Air CEO Vinay Dube said at the Dubai airshow, where the order was announced. He believes that the company is witnessing a strong recovery in air travel, and sees decades of growth ahead of them.

Boeing dominates India’s wide-body market, which has 51 planes, but ticket wars and high costs have resulted in casualties among full-service carriers, like Kingfisher Airlines in 2012 and Jet Airways in 2019, allowing low-cost carriers and Airbus to become even more prominent.

Boeing’s proportion of India’s 570 narrow-body planes plummeted to 18 percent from 35 percent following Jet’s demise in 2018, according to consultant CAPA India. SpiceJet is the country’s sole customer for the MAX jets at the moment. Thus, Akasa’s entry into the market with MAX planes is unquestionably a significant triumph for Boeing.

According to a statement issued by Akasa Air, the airline intends to begin offering flights across India in the summer of 2022, with the goal of being “the nation’s most trustworthy, cheapest, and greenest airline.”

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Kalai Raajan

Kalai has always wanted to work in the aviation industry, having been fascinated by its inner workings since he was a child. In pursuit of his dream, he obtained a diploma in aviation management and is currently interning with a low-cost airline, under in-flight policies. In his free time, he loves to engage in recreational activities, and watch sports. In the upcoming years, Kalai intends to pursue his degree at a business school before working as an executive for a global airline around the world.

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