New Delhi: Ace Investor and billionaire Rakesh Jhunjhunwala is foraying into the aviation sector and is contemplating to invest $35 million to launch an ultra-low-cost airline Akasa Air.
The airline will house 70 aircraft within the next four years while the aircraft can carry 180 passengers. Jhunjhunwala said in a Bloomberg TV interview that he is “very, very bullish on India’s aviation sector in terms of demand”. Jhunjhunwala will own 40 percent of Akasa Air and is expecting a no-objection certificate from the Aviation Ministry in the next 15 days. A former senior executive of Delta Air Lines Inc will also be associated with Jhunjhunwala’s Akasa Air.
Jhunjhunwala’s airlines is launching at a time when the COVID-19 pandemic has had a massive impact on the Indian aviation sector. Major airlines have been facing big losses with rampant lay off of employees, sending them on leave without pay, or cutting their salaries being the harsh reality.
The government also had to extend the deadline for submitting bids for Air India five times since 2020.
To survive the pandemic-induced crisis, all airlines took cost cutting measures like firings or pay cuts in 2020. In April, GoAir sent the majority of its employees on leave without pay. Air India had in April cut the salaries of its employees by 10 per cent. At the same time, SpiceJet and IndiGo cut the salaries of all employees by 10-30 per cent and 5-25 per cent, respectively. In July, IndiGo also laid off 10 per cent of its workforce. AirAsia India in April has cut the salaries of its senior employees by up to 20 per cent. Starting April, Vistara implemented a leave without pay program for its employees based on seniority.
With PTI Inputs