Rakesh Jhunjhunwala, India’s billionaire investor, is working on launching a budget airline with a fleet of 70 aircraft. The proposed airline, named Akasa Air, will be acquiring its fleet of aircraft over the next four years, reported Bloomberg. Jhunjhunwala’s move into aviation comes at a time when international and domestic carriers have been beset with financial uncertainty because of the COVID-19 pandemic. Jhunjhunwala, however, will be hoping for an uptick over the next four years, with more people travelling again.
Jhunjhunwala will invest $35 million in the new project and he will hold a 40 percent stake in the airline. The Big Bull has approached the Aviation Ministry to obtain a no-objection certificate (NoC).
CNBC-TV18 has confirmed the story independently.
"For the culture of a company to be frugal you’ve to start off fresh,” said Jhunjhunwala in an interview with Bloomberg TV. He then went on to add, “I’m very, very bullish on India’s aviation sector in terms of demand.”
Akasa Air is intended to be a budget airline, comprising planes with a capacity of 180 passengers.
Jhunjhunwala’s entry will be one of the biggest moves in the Indian aviation sector this year. Earlier in the year, Jet Airways was finally cleared to fly again after the Murari-Kalrock consortium bought the airline out of insolvency proceedings.
But India’s aviation sector has not had a smooth ride even before the pandemic. Kingfisher Airlines and Jet Airways were the two largest domestic players and both collapsed due to price pressures. After the pandemic, major players like Vistara, owned by Tata Group and Singapore Airlines; IndiGo, and Spicejet have struggled due to unprecedented losses following the global lockdown during the COVID-19 pandemic.
Jhunjhunwala, for his part, remains optimistic about his new venture, even though he does not see all of the competition pulling through. "I think some of the increment players may not recover,” he told Bloomberg Quint. He then added, “I’ve got some of the best airline people in the world as my partners."