Billionaire investor Rakesh Jhunjhunwala plans to own 70 planes within four years for a new airline he wants to start in India with the optimism that more people will travel by air.
Jhunjhunwala, who is considering a $ 35 million investment and will own a 40% stake in the carrier, is expected to receive a certificate of inactivity from India's aviation ministry within the next 15 days, he said in an interview with Bloomberg on Wednesday.
The ultra-budget airline will be called Akasa Air and the team, including a former senior executive from Delta Air Lines Inc, are studying planes that can carry 180 passengers, he said.
It was a bold bet by Jhunjhunwala, known locally as Warren Buffett in India, in a market that has seen several airlines collapse in the face of an intense and direct price war.
However, the world's fastest-growing airline market was once very attractive and Jhunjhunwala is looking for an opportunity to attract customers with a brand new airline offering low fares.
“For a frugality business culture, you have to start from scratch,” says Jhunjhunwala. "I'm very, very optimistic about the needs of the aviation sector in India."
Even before the pandemic, Indian airlines were struggling. Kingfisher Airlines Ltd, once the country's second-largest domestic airline, ceased operations in 2012 and Jet Airways India Ltd, which was recently allowed to fly again, collapsed in 2019.
Due To the demand for air travel around the globe, the airline industry is more at risk of a slower recovery as the threat of a third wave of infections looms. Airlines are feeling the impact.
Vistara, which Singapore Airlines Ltd jointly owns with the Tata Group, is in talks with Boeing Co and Airbus SE to delay aircraft deliveries and change payment schedules.
IndiGo, India's largest airline, reported a larger-than-expected loss as Covid disruptions dented revenue. That doesn't stop Jhunjhunwala, who according to Forbes has an estimated net worth of $4.6 billion.