Analysis: Akasa Air to launch flights to Lucknow this Sunday

Akasa Air – the youngest airline in India which operates all B737-8 MAX aircraft, will launch flights to Lucknow this Sunday (Dec 25, 2022). This will be the Eleventh destination for the airline and comes in quick succession after the launch of flights to Vizag early this month. The airline will operate a daily flight to Lucknow from Bengaluru and Mumbai, with timings as below

QP1360 BLR0740 – 1015LKO

QP1361 LKO1630 – 1905BLR

QP1123 BOM1350 – 1550LKO

QP1122 LKO1100 – 1305BOM

This reinforced my belief that the airline has a strategy in place, which is to push the weaker player to a corner (AirAsia India / Go FIRST) in smaller markets while opting for salami slicing in larger markets. Akasa Air is now the third largest airline at Bengaluru, a feat which would not have been possible at either Mumbai or Delhi. IndiGo and AirAsia India are first and second in terms of domestic departures at Bengaluru. Why does the launch of Lucknow reinforce my belief? AirAsia India launched Lucknow operations this August!

From a planning perspective, it is always easier to slice a larger pie than creating a pie or taking a bigger piece of a smaller pie. But the logic flips when it comes to metro to metro connectivity where a larger presence ensures you have command over both – passengers and yields, since these are high frequency/ volume markets. On this backdrop, the route selection for Akasa Air has been an interesting mix of duopoly, with a possible hope of first attacking the weaker player before taking on IndiGo. 

You can read more about Lucknow in my earlier blog about AirAsia India. 

What do the numbers say?

By domestic passenger footfall, Lucknow moves between 12th to 15th position in Indian skies. The top market is Delhi with a demand of over 2,000 passengers per day while Mumbai comes in second at half of that demand. Bengaluru, Kolkata and Hyderabad follow with 850, 500 and 400 passengers per day respectively each way. 

IndiGo remains the largest carrier with 60% of total departures at Lucknow. AirAsia India comes in second with 15%. Go FIRST, which had a strong proposition at Lucknow, has vacated some space due to its engine issues which has given room for others to grow. In that essence, AirAsia India timed its Lucknow entry well. Akasa Air will have seven of 50 weekly departures between Lucknow and Bengaluru, while it will have seven of 64 weekly departures between Lucknow and Mumbai. 

Lucknow is connected to Delhi, Mumbai, Bengaluru, Kolkata, Ahmedabad, Goa, Hyderabad, Guwahati, Indore, Chandigarh, Prayagraj, Jaipur, Nagpur, Patna, Pune, Dehradun, Chennai, Ranchi, Agra, Raipur, Amritsar and Pantnagar on the domestic side while on the international it has flights to Dubai, Muscat, Riyadh, Sharjah, Jeddah, Bangkok – Don Mueung and Dammam. 

Network Thoughts

The current Lucknow operations look incomplete for Akasa Air. I would have expected the next aircraft to add flights to Lucknow, but instead that would operate flights to Manohar International Airport, North Goa. If the airline sticks to its aim of 18 aircraft by March 2023, there are another seven planes lined up in the next 90 days and one of those could be used to bolster the presence at Lucknow. 

Those who have read my previous blog – Connect the dots would know how Akasa Air has built its network so far, making the existing destinations denser and while at Pune – every airline remains at the mercy of slots being doled out, the case is not so for Vizag or Lucknow and those stations could be up for strengthening soon. This summary below shows the weekly departures from each of its operating stations and number of competitors on each route.

How will it bolster Lucknow? Does it have additional night parking in Mumbai? We could then see Mumbai – Lucknow – Bengaluru – Lucknow – Mumbai – Ahmedabad – Mumbai, to complement the current operations. Will the airline base aircraft in Lucknow? The airport is to be expanded manifold in the next few years and a presence now makes it a historical carrier for future growth. In that case could we see base aircraft departing to Bengaluru (and Mumbai)? If both capacity and passenger numbers are to go by, it has been smart in not launching Delhi right now and when it does it should with multiple frequencies, just like it did with flights to Kochi and Chennai from Bengaluru. 

Currently Akasa Air has a token presence on Mumbai – Delhi and Bengaluru – Delhi and I am sure it would not want more routes like these, so if and when it does enter the Delhi – Lucknow segment, it would be with three flights a day (or start with two and add one later). This helps in two ways, not adding a sudden spike to the capacity on the sector – which puts pressure on yields, naturally the most on the latest entrant and having multiple offerings to the market, since token presence does help with either yields or traffic. For now, the airline could struggle on the Bengaluru route where both IndiGo and AirAsia India have dominating presences. The shrinking of Go FIRST eases the pressure on the new entrant as well as incumbents. 

How does the growth shape up and how does the market adjust? The best time to revisit this will be the first week of April.

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