Big Bull Rakesh Jhunjhunwala-promoted Akasa Air is set to take wings in the summer of 2022. How is the ultra low cost carries planning to negotiate such a competitive market?
Domestic low cost carrier scenario is set to get more crowded next year, with the Rakesh Jhunjhunwala-promoted Akasa Air set to take wings. The airline has just crossed its first hurdle. It has received the initial clearance from the civil aviation ministry. The clearance was received by SNV Aviation, the parent company of the Akasa Air brand.
The company recently said in a media release that it has received a “no objection certificate” from the ministry and expects to begin flights across India in the summer of 2022.
The media has quoted Vinay Dube, CEO of Akasa Air, as saying: “We are extremely happy and grateful to the Ministry of Civil Aviation for their support and for the grant of the NOC. We will continue to work with the regulatory authorities on all additional compliances required to successfully launch Akasa Air.”
Unveiling ‘The Rising A’ of Akasa Air Inspired by elements of the sky, The Rising A symbolises the warmth of the sun, the effortless flight of a bird, and the dependability of an aircraft wing. Always moving upwards. Always inspiring to rise.
This is set to be an ultra low-cost airline, and billionaire Big Bull Jhunjhunwala has a 40% stake in the company. As per initial reports, the airline plans to operate around 70 planes in the next four years and talks are on with Boeing for its B737 Max planes. At the same time, Airbus is also in conversation with Akasa for a procurement deal possibly for its A320 series – according to Airbus’ Chief Commercial Officer Christian Schere.
The company has experienced hands on board, with aviation industry veterans such as former Jet Airways CEO Vinay Dube and ex-IndiGo president Aditya Ghosh expected to run the airline. While Dube is the CEO of the company, Ghosh is expected to be on the board as Jhunjhunwala’s nominee.
“The Rising A is inspired by elements from the sky. It symbolises the warmth of the rising sun, the effortless flight of a bird and the dependability of an aircraft wing. ‘It’s Your Sky’ is the brand’s promise to embrace everyone and to create an inclusive environment for all Indians regardless of their socio-economic or cultural backgrounds. It is a powerful pledge of ownership, promise, and possibilities that accompany each traveller on their journeys,” Akasa Air said in a statement.
Within the crowded airspace, how does Akasa expect to stand out? The promos of the company showcase it as an “endeavour to be the nation’s most dependable, affordable and greenest airline”. The men at the top are experienced airline hands, aided by the financial brain of Jhunjhnwala.
Within the ULCC (ultra low cost carriers) airline business model, the company intends to focus on keeping operating costs even lower than typical budget airlines like Indigo and SpiceJet. How will that be possible in a pricey market? The company wants to unbundle certain amenities that are usually associated with the full-service airline experience — like seat selection, food and beverages, etc. however, these are facilities that aren’t available in regular low-cost budget airlines operating now either. So there has to be a model which saves on every penny.
There will be unbundling of services like checked-in baggage, cabin baggage, etc. that means every aspect of the airline facility will be charged, such as usage of overhead luggage areas – possibly even coin or card operated and checked in baggage will surely be chargeable, it seems. Hence this will not be bundled into the fare. The government authorities will have to look into this for non-violation of basic rights.
Who is Rakesh Jhunjhunwala?
According to Forbes, he is an investor “with a Midas touch,” and is often referred to as India’s Warren Buffett. He is the son of an income tax officer (commissioner) and started dabbling in stocks while still in college. He began investing with $100 in 1985 when the Bombay Stock Exchange Index was at 150.
His most valuable listed holding is watch and jewellery maker Titan, part of the Tata conglomerate. Jhunjhunwala also has stakes in privately held companies such as Star Health Insurance, Metro Brands and Concord Biotech.
He is the 36th richest Indian (2021) and the 665th richest in the world. Recently the 61-year-old saw his net worth more than double to $5.5 billion (at this point it is said to be in the region of $ 6.1 billion). That was the time when he placed the $35 million bet (for 40% of the stake) on Akasa.
He is from Rajasthan, but lives in Mumbai, is married and has three children. He became a chartered accountant, after his B.Com degree from the University of Mumbai. His privately owned stock trading firm Rare Enterprises derives its name from the first two initials of his name and his wife Rekha’s name.
Jhunjhunwala is the chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd. and sits on the board of directors of Prime Focus Limited, Geojit Financial Services, Bilcare Limited, Praj Industries Limited, Provogue India Limited, and Concord Biotech Limited, Innovasynth Technologies (I) Limited, Mid Day Multimedia Limited, Nagarjuna Construction Company Limited, Viceroy Hotels Limited, and Tops Security Limited.