Former Indigo President Aditya Ghosh will team up with billionaire investor Rakesh Jhunjhunwala along with former Jet Airways CEO Vinay Dube to launch an ultra-low-cost airline—Akasa Air, sources said.
Bloomberg reported that Rakesh Jhunjhunwala, also known as India’s Warren Buffett, is working on launching a budget airline with a fleet of 70 aircraft with other investors on board. The proposed airline, named Akasa Air, will be acquiring its fleet of aircraft over the next four years.
Jhunjhunwala’s move into aviation comes at a time when international and domestic carriers have been beset with financial uncertainty because of the COVID-19 pandemic.
Jhunjhunwala will invest $35 million (around Rs 260 crore) in the new project and he will hold a 40 percent stake in the airline. The Big Bull has approached the Aviation Ministry to obtain a no-objection certificate (NoC).
This will be Ghosh’s second coming to the aviation industry after he quit InterGlobe Aviation, the parent company of the country’s largest airline IndiGo, in 2018 after a 10-year tenure as its president and whole time director.
Ghosh was integral to IndiGo’s success. In 2008, he joined the Gurugram-headquartered airline, and under his leadership, it became the country’s biggest airline by market share with a fleet of 160 aircraft, more than a thousand daily flights and a market share of Rs 55,000 crore, before he stepped down. Its market capital as of Wednesday’s close was Rs 64,168 crore.
ET reported that Ghosh will hold less than 10 per cent stake in the ultra-low cost carrier and will be a board member (as Jhunjhunwala’s nominee). He went on to add that the airline venture will be his key focus but he won’t be a part of the management team. Further, Dube will own over 15 per cent and be its CEO.
American investor Par Capital Management which has investments in US-based ultra-low-cost carrier Sun Country Airlines and homestay aggregator Airbnb is also pumping money into Akasa.