Rakesh Jhunjhunwala's Akasa Air Gets Approval to Launch Operations
Rakesh Jhunjhunwala is not called the Warren Buffett of India without reason. He is known to bet big on stories that he finds convincing. Titan is, perhaps, the finest example of his acumen in picking stocks early and holding them through its journey. Interestingly, his next big bet is on airways and like his mentor, Radhakishan Damani, this time Rakesh will also drive the business.
Akasa Air has announced that it has received approval from the Ministry of Civil Aviation to commence its air operations by the middle of 2022. The next step will be to get the approval of the Directorate General of Civil Aviation (DGCA). Subsequently, the flight manuals, logs and processes have to be documented and approved before starting.
Jhunjhunwala has already roped Vinay Dube as the CEO of his airline venture. Vinay Dube was formerly the CEO of Jet Airways before it was grounded. While Rakesh has invested Rs.248 crore in Akasa Air, the promoter of New Horizon Funds is also putting his funds on the project.
Check - Rakesh Jhunjhunwala Bets Big on Indian Aviation with Akasa Air
Apart from Dube, the other airline veteran who has teamed up with Jhunjhunwala for Akasa Air is Aditya Ghosh, the former CEO of Indigo Airlines. Ghosh is credited with the ruthlessly efficient model adopted by Indigo which created the momentum for Indigo to eventually capture 55% market share of the domestic Indian market.
The airline industry, being a highly contact intensive sector, has borne the brunt of the pandemic. However, the recovery is likely to be equally rapid. There is a huge gap in the aviation sector and the recent instance of Tatas winning the bid for Air India is just one more example of power pockets getting created in the aviation industry. The game is open and the market will gravitate to the most efficient and the most economical airline.
While the aircraft acquisition and leasing plans of Akasa Air are still under wraps, it is already being reported that in the coming year Akasa may be the biggest buyer of Boeing 737 aircraft outside of the United States. It surely looks like another aggressive innings for Rakesh Jhunjhunwala.
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