Rakesh Jhunjhunwala, the Indian billionaire investor, a new airline planning to roll out a fleet of around 70 aircraft over a period of four years, which it aims to set up in India. According to a Bloomberg report, he is trying to build on the optimistic prediction that more people will start traveling by air again. As per reports, the tycoon is eyeing an investment of around $35 million and with that, he will own 40 percent of the carrier. He is also simultaneously gunning for the no-objection certificate aviation ministry of india Within the next 15 days, he was quoted as saying in a Bloomberg television interview on Wednesday.
The new airlines will be relatively low-cost and will be dubbed ‘Akasa Air and the Team’. He was also quoted as saying that he would consider investing in carriers that can seat 180 passengers. This has been termed as a bold move by the report, in which Jhunjhunwala is taking a risk in a pandemic-stricken time where most other airlines are struggling for water. All this against the backdrop of high cost of aviation industry in India. According to reports, Jhunjhunwala is looking to enter this big market with a new name and lower fares, hoping to attract customers.
Speaking on the entry of his new airlines in an interview with Bloomberg Television, Jhunjhunwala said, “For a company culture to be frugal, you have to start afresh.” He then added, “I am very, very optimistic on India’s aviation sector in terms of demand.”
Larger airlines, such as Kingfisher Airlines Limited, had to close their doors and halt their operations in 2012, before the pandemic hit. It was the second largest airline in the industry at that time in the domestic carrier segment. Similarly, Jet Airways India Limited also collapsed after being cleared to fly once again in 2019.
Now, more than ever, the risk of collapse is at an all-time high in light of a possible third wave of the COVID-19 pandemic. Though the demand may increase across the globe, but according to reports the Indian aviation industry is still at risk.
When it comes to taking on the current competition in the skies, Jhunjhunwala told Bloomberg Quint, “I think some salary hike players may not be okay.” He then added, “I’ve got some of the best airline people in the world as my partner.”
The big players are still struggling on the subject of the competition. Vistara, which is jointly owned by the Tata Group and Singapore Airlines Ltd, is looking to delay the delivery of its aircraft and possibly change its payment timetable, according to reports. Parallelly, India’s largest sustainable airline, IndiGo, had reported a loss that exceeded their expectations due to the pandemic-induced disruptions, a Bloomberg Quint report said.
The billionaire had recently increased his stake in the private lender’s stock by adding another Rs 25 lakh to his Federal Bank shares, expanding his portfolio during the April-June 2021 quarter. With this move, the stock hit a new high on Monday; This is the highest in the previous three days. According to a report in Live Mint, his overall holding increased from 2.40 per cent to 2.78 per cent.
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