The low-budget carrier, started by billionaire trader Rakesh Jhunjhunwala, CEO Vinay Dube and former IndiGo president Aditya Ghosh in 2022, said it expects to cancel over 700 flights in September alone.
As per Business Standard, a representative for the airline told the Delhi High Court that 43 pilots have abruptly resigned.
The Akasa lawyer told Justice Manmeet Pritam Singh Arora the pilots did so without serving their notice period – six months for first officers and a year for captains.
This has resulted in the airline having to cancel ‘scores of flights’ daily.
The airline has thus cancelled 24 flights every single day in September.
In August, the low-budget carrier cancelled 700 flights.
On Tuesday, Dube in an email to employees explained that the budget carrier is flying less and will give up market share in the short term to ensure it runs a reliable operation.
“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,” Dube said.
“Not only is this illegal in law but also an unethical and selfish act that disrupted flights in August forcing last minute cancellations that stranded thousands of customers causing significant inconvenience to the travelling public,” an Akasa Air spokesperson said as per Live Mint.
Why is this happening?
As per Business Standard, the pilots have joined rival groups.
The report quoted sources as saying that a top Akasa executive even penned a letter to a rival outlining its concerns over the abrupt exit and calling the behaviour ‘unethical’.
As per News18, some exiting pilots claimed that the airline violated their contracts by changing their salary structure.
The company has also taken aim at Air India Express – blaming the airline for luring away its pilots.
What happens next?
Akasa may be in serious trouble.
As per Business Standard, Akasa lawyers told the Delhi High Court the company is in a ‘state of crisis’ and may even shut its doors.
The airline has asked the Delhi High Court to direct the DGCA to enforce the notice period for exiting pilots.
The company has initiated legal action against the pilots who have quit without serving their mandatory contractual notice period, Dube said.
As per News18, the airline has sought Rs 22 crore in compensation from the pilots who abruptly left their jobs.
The piece labelled the turn of events a ‘massive setback’ for the firm.
“The airline’s struggle to secure an adequate workforce looms ominously over its financial stability, threatening the realization of its ambitious expansion plans. Additionally, Akasa must earnestly address the grievances of its remaining pilots, particularly regarding changes in compensation, to restore harmony within its ranks,” the piece concluded.
Akasa’s market share slipped to 4.2 per cent in August from 5.2 per cent a month earlier, according to latest available data from the Directorate General of Civil Aviation (DGCA), India’s aviation regulator.
The airline had in June placed an order for four Boeing 737 Max jets to further its plans to fly internationally by the end of the year.
‘Don’t be alarmed’
But Dube remains upbeat.
He said the company is on track to announce a three-digit aircraft order before the end of the year.
Dube in the email also told employees not to “be alarmed or distracted by media headlines, especially those that are speculative and claim that the airline will shut down”, as per India Today.
“Please be assured though, that these are only short-term constraints,” he added.
“We are never more confident about our future and continue to invest prudently, with longer-term financial success in focus. We are also pleased to note that our disciplined approach has helped us establish a strong financial profile to execute on our ambitious plans.”
“The airline you have helped create 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,” he added.
“We have built an outstanding airline for our customers and ourselves and have delivered each milestone according to our plan. We are here for the long run and do not let anyone tell you otherwise,” Dube concluded.
The Ministry of Civil Aviation (MOCA) has designated the company as an International Scheduled operator, allowing Akasa to begin international flights, he said.
“The MOCA is now working on our request for traffic rights so you will have to wait a short while longer to know which international destination we will fly to first,” he added.
Akasa did not immediately respond to Reuters’ request for a comment.
With inputs from agencies