Rakesh Jhunhjunwala's Ultra-Low-Cost Airline Akasa Air To Have 70 Planes

Also known as India's Warren Buffett, Jhunjhunwala plans to invest Rs 260 crore ($35 million) for a 40 per cent stake in the carrier, which will have planes that can carry up to 180 passengers.

Billionaire Rakesh Jhunjhunwala. (File Photo/ Getty)

Mumbai: Billionaire Rakesh Jhunjhunwala, India's ace investor, plans to have 70 aircraft for the ultra-low-cost new airline Akasa Air, he wants to establish in India within four years, assuming that more people will travel by air.

Also known as India's Warren Buffett, Jhunjhunwala plans to invest Rs 260 crore ($35 million) for a 40 per cent stake in the carrier, which will have planes that can carry up to 180 passengers.

The new airline expects to receive a no-objection certificate from India's aviation ministry within the next 15 days, he said in a Television interview on Wednesday. 

Jhunjhunwala is taking a risk in a market where some airlines have failed due to intense fare wars and high costs. 

What was once the world's fastest-growing aviation market retains its allure, and Jhunjhunwala is looking for ways to entice flyers with a brand new carrier offering low fares with a team, which includes a former senior executive of Delta Air Lines Inc.

"For the culture of a company to be frugal, you've to start off fresh. I'm very, very bullish on India's aviation sector in terms of demand. I think some of the increment players may not recover. "I've got some of the best airline people in the world as my partners," Jhunhunwala told Bloomberg Television. 

Airlines in India were already struggling before the pandemic. Kingfisher Airlines Ltd., the country's second-largest domestic carrier, ceased operations in 2012, and Jet Airways India Ltd., which had recently been approved to resume operations, went bankrupt in 2019.

While global demand for air travel has been impacted, India's aviation industry is more vulnerable to a delayed recovery due to the threat of a third wave of the COVID-19 pandemic. Airlines are already feeling the heat. 

Jhunjhunwala is launching a new airline in India when Vistara, an airline co-owned by Singapore Airlines Ltd and conglomerate Tata Group, is in talks with plane makers 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 a result of the Covid disruption.

Know All About The Billionaire Promoter

• According to Forbes estimates, Rakesh JhunJhunwala, with a fortune of $4.6 billion as of July 28, is the world's 656th most prosperous globally.
• Rakesh Jhunjhunwala, an investor with a Midas touch, is often referred to as India's Warren Buffett.
• Jhunjhunwala, the son of an income tax officer, began dabbling in stocks while still in college.
• He started investing with $100 in 1985 when the Bombay Stock Exchange Index was 150; it now trades at more than 52,000.
• Titan, a watch and jewelry manufacturer, owned by the Tata conglomerate, is his most valuable listed holding.
• Jhunjhunwala also owns stock in privately held companies like Star Health Insurance, Metro Brands, and Concord Biotech.