Akasa Air is looking to raise 10.5 billion rupees ($110 million) through equity and debt, people familiar with the matter said, as India's youngest airline seeks funds to overcome challenges brought on by the Iran war.

The fundraising effort comes as the carrier navigates increased operational expenses linked to the conflict in the Middle East. Akasa Air, which began commercial operations in August 2022, has been expanding its domestic network rapidly but faces headwinds from elevated fuel prices and routing disruptions caused by the regional instability.

The airline plans to use the proceeds from the equity and debt raise to strengthen its balance sheet and support ongoing fleet expansion plans. Investors are being approached for participation in the funding round, which would provide crucial liquidity as the carrier works toward profitability in India's competitive aviation market.

Industry analysts note that the Iran war has created broader cost pressures for Indian carriers, with longer flight paths and higher insurance premiums adding to financial strain across the sector.