The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
India’s Akasa Air is set to expand its routes to Southeast Asia and the Indian subcontinent, aiming to capitalize on the growing demand for international travel from the world’s most populous nation. The Mumbai-based budget airline is preparing to launch flights to Kathmandu, Nepal, and Dhaka, Bangladesh, according to Praveen Iyer, chief commercial officer at Akasa’s parent company SNV Aviation Pvt.
Key Expansion Plans:
New Destinations: Akasa is targeting popular tourist destinations such as Thailand, Vietnam, Malaysia, and Indonesia for its future expansion.
Demand Growth: “Indians in general love travelling. That prompts us to look at the next set of expansion,” Iyer said. He highlighted strong outbound traffic from India starting October, particularly to Southeast Asian destinations.
Strategic Moves:
Fleet Expansion: Akasa has ordered 150 Boeing 737 Max jets in January, increasing its total order book to 226 jets, which will be delivered over the next eight years. The airline plans to use its narrowbody fleet for short-haul international routes of up to six hours.
Current Operations: The airline began its overseas operations in March, with flights to Doha from Mumbai and has since added routes to Abu Dhabi and Jeddah.
Competitive Landscape:
Market Share: Akasa currently holds a 4.7% share of the highly competitive Indian market, where IndiGo leads with 61% and Air India holds 14.2%.
Niche Offerings: The airline has distinguished itself by allowing pets on board, carrying 3,700 pets since November 2022.
No Fundraising Plans: Akasa is “well capitalised” and does not plan to raise additional funds, according to Iyer, though he did not provide details on the airline's path to profitability.
Industry Context:
Growing Competition: Akasa faces competition from local rivals like Air India and IndiGo, which are expanding their long-haul international routes. Moreover, overseas carriers such as Etihad Airways and Malaysia Airlines are increasing their presence in Indian cities.
Consolidation: The Indian aviation industry is consolidating, with Tata Group merging Air India and Vistara, and combining Air India Express with AIX Connect. IndiGo is also expected to launch a new premium cabin soon.
Outlook:
“We will always be around two 800-pound gorillas, right? One is the Tata group and the other is IndiGo. That’s the reality,” said Iyer. “How we build our network is what matters to us.”
As Akasa Air continues its rapid expansion, it aims to tap into the burgeoning travel demand while navigating the competitive landscape of India's aviation industry
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