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Billionaire investor Rakesh Jhunjhunwala is planning on having 70 aircraft within four years for a new airline he wants to set up in India on optimism more people will travel by air.
Jhunjhunwala, who is considering investing $35 million and would own 40 per cent of the carrier, expects to get a no-objection certificate from the Ministry of Civil Aviation in the next 15 days, he said in a Bloomberg Television interview on Wednesday.
The ultra-low-cost airline will be called Akasa Air and the team, which includes a former senior executive of Delta Air Lines Inc, is looking at planes that can carry 180 passengers, he said.
It’s a bold bet by Jhunjhunwala, called India’s Warren Buffett, in a market that has seen some airlines collapse in the face of intense fare wars and high costs. Still, what was once the world’s fastest-growing aviation market holds an allure, and Jhunjhunwala is looking at opportunities to woo flyers with a brand new carrier offering low fares.
Bullish on aviation
“For the culture of a company to be frugal, you’ve to start off fresh,” Jhunjhunwala said. “I’m very, very bullish on India’s aviation sector in terms of demand.” Even before the pandemic, airlines in India were struggling. Kingfisher Airlines, once the No 2 domestic carrier, ended operations in 2012, and Jet Airways, which was recently approved to fly again, collapsed in 2019.
Not only has air travel been hit globally, the aviation industry is also at greater risk of delayed recovery as the threat of a Covid third wave looms. Airlines are feeling the impact.
Vistara, which Tata Group jointly owns with Singapore Airlines, is asking Boeing and Airbus to delay aircraft deliveries and change payment timetables.
IndiGo reported a wider-than-anticipated loss as Covid disruption crimped revenues.
But that’s not deterring Jhunjhunwala who, according to Forbes, has an estimated net worth of $4.6 billion. “I think some of the increment players may not recover,” he said. “I’ve got some of the best airline people in the world as my partners.”
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