India's Akasa Air cuts flights as pilots quit, flags shutdown risk in court (updated)

Spicejet

20/09/2023 08:55

(Recasts throughout with source feed, details from memo)
    By Aditi Shah and VarunVyas Hebbalalu
       NEW DELHI, Sept 20 (Reuters) - Indian budget carrier
Akasa Air has been forced to cut flights in the short-term after
many of its pilots quit abruptly, sparking a legal dispute in
court where the company has warned that further resignations may
even force it to shut down.
    A small set of pilots "abandoned their duties" and left
without serving their mandatory contractual notice period,
causing a disruption of flights, but the airline is on course to
invest in growing its operations and ordering more planes, CEO
Vinay Dube told employees in an email on Tuesday.
    Dube's email came on a day when the airline's counsel told a
Delhi court that Akasa was in "crisis" and may shut down after
the abrupt resignations, said a person with direct knowledge of
the hearing.
    Akasa told the court it cancelled 600 flights in August and
would be forced to cancel up to 700 more in September if the
resignations continue, the person added.
    "We have chosen to fly less and give up market share ...
these are only short-term constraints," he said, adding that the
airline had "strong finances" and was confident of its future.
    Akasa has dragged the pilots, many of whom have joined rival
Air India Express, to court and initiated legal proceedings
against the aviation regulator to enforce the notice period.
    The notice period ranges between 6-12 months, depending on
the pilot's rank, according to the aviation regulator. 
    Akasa did not immediately respond to a Reuters request for
comment.
    The distress call by Akasa comes at a time of deep
polarisation in India's aviation industry with IndiGo, the
country's biggest carrier, and Tata-owned Air India controlling
nearly two-thirds of the market, while Go Air struggles to come
out of bankruptcy and SpiceJet  SPJT.BO  faces a funding crunch.
    Founded by Dube and former IndiGo  INGL.NS  president Aditya
Ghosh in 2022, Akasa saw its market share dip to 4.2% in August
from 5.2% a month earlier, government data showed.
    Akasa, which has 72 Boeing  BA.N  planes on order, ordered
four more 737 MAX jets in June to further boost its
international flying plans. It is on track to announce a new
three-digit aircraft order before the end of the year, Dube
said. 
    Dube said India's civil aviation ministry last week cleared
Akasa to begin international flights and the government is
working on the airline's request for traffic rights after which
it can firm up the destinations it flies to first.
    "Akasa is a well-run airline with strong finances and a
solid plan," he said.

 (Reporting by Aditi Shah and Varun Vyas, additional reporting
by Aditya Kalra; Editing by Louise Heavens, Christian
Schmollinger, Kim Coghill and Bernadette Baum)
 ((aditi.shah@tr.com; +91-11-4954 8023, +91-11-3015 8023;
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