Mumbai. Billionaire investor Rakesh Junjhunwala plans to get 70 planes over the next four years for a new airline he wants to open in India, hoping more people will travel by plane.
Junjhunwala, who is considering an investment of $ 35 million and will own 40 percent of the airline, expects to receive a no-objection certificate from India’s aviation ministry in the next 15 days, he said in an interview with Bloomberg on Wednesday.
The ultra-low-cost airline will be called Akasa Air, and the team, which includes a former executive at Delta Air Lines Inc., is studying aircraft capable of carrying 180 passengers, he said.
A bold bet
This is a bold bet by Junjhunwala, known locally as the Indian Warren Buffett, in a market where some airlines have collapsed due to fierce travel wars and high costs. However, what was once the fastest growing aviation market in the world is gaining attention and Junjhunwala is looking to attract passengers with a new carrier offering low fares.
“To have a lean culture, you have to start from scratch,” Junjhunwala said. “I am very, very optimistic about India’s aviation sector in terms of demand.”
Even before the pandemic, India’s airlines had problems. Kingfisher Airlines Ltd., which was once the country’s second largest domestic carrier, ceased operations in 2012 and Jet Airways India Ltd., which was recently allowed to fly again, went bankrupt in 2019.
While demand for air travel has declined globally, India’s aviation industry is at greater risk of a slowed recovery as a third wave of infections looms. Airlines are feeling the shock.
Vistara, which Singapore Airlines Ltd. owns jointly with the conglomerate Tata Group, is in talks with Boeing Co. and Airbus SE on delayed aircraft deliveries and changes in payment schedules. IndiGo, India’s largest airline, reported higher-than-expected losses as the Covid breach reduced its revenues.
That doesn’t stop Junjhunwala, whose fortune is estimated at approximately $ 4.6 billion according to Forbes.
“I think some players may not recover,” he said. “My partners are some of the best airlines in the world.”