Akasa Air was Announced as Indian Billionare's plan.
Rakesh Jhunjhunwala, an Indian billionaire, has announced plans to launch a new airline called Akasa Air.
During an interview with Bloomberg television, Jhunjhunwala confirmed that the new carrier will launch in 2022.
Because of his stock market success, Jhunjhunwala is known as the ‘Warren Buffett of India.’ Forbes estimated his net worth to be $4.5 billion as of May 2021.
According to reports in the media, he is forming a partnership with two former airline CEOs: Aditya Ghosh, formerly of IndiGo, and Vinay Dube, formerly of both Go First (previously Go Air) and Jet Airways.
Jhunjhunwala intends to put $35 million into the company, giving him a 40% stake. Within four years, Akasa Air will have 70 narrowbody aircraft.
“It will be an ultra-low-cost airline and I’ve got some of the best airline people in the world as my partners,” he says.
“It’s a very good team and I will incentivise them in a way you will not believe. It depends on the culture of the company…(we will) incentivize, empower, delegate, respect.”
He also believes that long-term demand for air travel in India is “very bullish,” and that some existing players may not survive.
Jhunjhunwala had this to say about approvals: “I don’t need anybody from the aviation industry. I’ve got the team. I’ve got the money.”
JhunJhunwala responded to a Bloomberg interviewer’s remark that the best way to become a millionaire is for a billionaire to start an airline: “When I first entered the stock market in 1985, they said the best way to go bankrupt is to go to a stock broker.”
Varun Ginodia of Ambit Capital believes that focusing on low-cost is the right move for the difficult Indian market, but that the new carrier must also find a way to increase ancillary revenue, which is currently difficult in India.
“plan to fly 70 aircraft in 4 years is also not easy,” he says. “Vistara and AirAsia India have been present for last 5-6 years, and have reached forty-seven and thirty-four aircraft respectively.”
Separately, India’s average daily passenger departures have risen, reaching 252,000 on August 2 after plummeting to well below 50,000 in May, when the country was wracked by the deadly second wave of the coronavirus pandemic. Daily passenger departures were consistently over 400,000 before the pandemic.
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