Akasa Air Eyes ₹1,050 Crore Fundraise as Iran Conflict Pushes Costs Higher: Will India’s Youngest Airline Stay on Its Growth Path?

Akasa Air Plans Fresh Fundraising Amid Rising Aviation Costs Triggered by Iran Conflict

India’s youngest commercial airline, Akasa Air, is reportedly looking to raise ₹1,050 crore (approximately $110 million) through a combination of equity and debt as it navigates rising operational costs linked to geopolitical tensions in the Middle East.

According to reports, the Mumbai-based airline is seeking fresh capital to maintain its expansion strategy despite the financial strain caused by higher aviation fuel prices and flight disruptions following the conflict involving Iran.

Equity and Debt Funding Under Discussion

People familiar with the matter have indicated that Akasa Air aims to raise around ₹800 crore through equity investments, with the remaining ₹250 crore expected through debt financing.

The airline is reportedly in discussions with both existing shareholders and two new international investors—one from Asia and another from the United States. At the same time, it is also exploring financing from state-run banks under the Indian government’s special credit support programme designed for airlines affected by the recent geopolitical crisis.

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While the airline has not officially confirmed the fundraising amount, it acknowledged that it is evaluating opportunities to benefit from the government’s aviation credit support to strengthen its long-term growth plans.

Middle East Conflict Raises Pressure on Airlines

The recent conflict involving Iran has disrupted several international flight routes while driving up global aviation turbine fuel (ATF) prices.

Fuel remains one of the largest operating expenses for airlines, often accounting for nearly 40% of total operating costs. The sharp increase in fuel prices has placed additional financial pressure on carriers across the world, including those in India.

Akasa Air had previously secured funding in 2025, but changing market conditions following the geopolitical tensions have prompted the airline to seek additional capital.

Industry Faces Financial Challenges

Akasa’s fundraising efforts reflect a broader trend within the Indian aviation sector.

Air India, owned by the Tata Group, has also been working to strengthen its financial position after reporting significant losses. Meanwhile, low-cost carrier SpiceJet is reportedly exploring fresh funding through government-backed lending programmes.

The developments highlight the financial challenges airlines continue to face despite strong passenger demand.

Growth Continues Despite Headwinds

Despite the difficult operating environment, Akasa Air has continued to expand its domestic presence.

The airline reportedly increased its flight operations by 13.2% year-on-year, even as overall industry capacity declined during parts of the year.

Currently operating a fleet of 40 Boeing 737 MAX aircraft, Akasa also reported a 37% increase in operating revenue for the financial year ending March 31, supported by a 30% rise in seat capacity.

The company has also outlined plans to expand its overall capacity by another 30% during the current financial year, underlining its confidence in long-term demand for air travel.

Strong Investor Backing

Akasa Air operates under SNV Aviation Pvt. Ltd., whose shareholders include airline founder and Chief Executive Officer Vinay Dube, the family of late investor Rakesh Jhunjhunwala, 360 ONE Asset Management, and other institutional investors.

As the aviation industry continues to deal with global uncertainty, the airline’s ability to secure fresh capital could play an important role in sustaining its rapid expansion while managing higher operating costs.