Jhunjhunwala, who is looking at investing $35 million and will own 40% of the carrier, is expected to receive a no-objection certificate from India’s aviation ministry in the next 15 days, he said in a Bloomberg television interview on Wednesday.
Ultra-low cost airline will be called akasa air And the team, which includes a former senior executive at Delta Air Lines Inc., is looking at planes that can carry up to 180 passengers, he said.
It is a bold bet by Jhunjhunwala, known locally as the Warren Buffett of India, in a market that has seen some airlines face intense fare wars and high costs.
Nevertheless, in what used to be the world’s fastest growing aviation market, Jhunjhunwala is exploring opportunities to woo passengers with a brand new carrier offering low fares.
Jhunjhunwala said, “For the company culture to be frugal, you have to start afresh.” “I’m very, very optimistic on India’s aviation sector in terms of demand.”
Even before the pandemic, airlines in India were struggling. Kingfisher Airlines Ltd, once the country’s second largest domestic carrier, ceased operations in 2012, and Jet Airways India Ltd, which was recently approved to fly again, collapsed in 2019.
While demand for air travel has been hit globally, India’s aviation industry is at greater risk of a delayed recovery as the threat of a third wave of infections looms large. Airlines are feeling the impact.
Vistara, which Singapore Airlines Ltd jointly owns with the Tata Group, is in discussions with The Boeing Company and Airbus SE to delay the delivery of the aircraft and change the payment timetable.
India’s largest airline, IndiGo, reported a wider-than-anticipated loss as the Covid disruption dented its revenue.
This is not deterring Jhunjhunwala, who has an estimated net worth of around $4.6 billion according to Forbes.
“I think some salary hike players can’t recover,” he said. “I’ve got some of the best airline people in the world as my partner.”
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