Jhunjhunwala-backed budget airline may take off by year-end

A startup airline funded by billionaire investor Rakesh Jhunjhunwala and piloted by aviation veteran Vinay Dube could take to the skies by late this year or early next.

Dube said that an application for a no objection certificate — the precursor to airline licence — has been sought from the aviation ministry for ‘SNV Aviation’, which will be the holding company for the proposed budget airline ‘Akasa Air’. “We are working with the ministry as per the regulations to ensure that we are compliant with all necessary filing requirements and hope that the NOC will be granted to us soon,” Dube said.

While Jhunjhunwala will invest about $35 million (around Rs 260 crore) and hold a stake of 40% approximately, there will be other investors on board too. The ultra-low cost airline plans to have a fleet of 70 aircraft in four years.

“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,” Jhunjhunwala told Bloomberg.

This twin logic — India being the fastest growing aviation market globally before the pandemic, and weak financials of all airlines here except IndiGo and the ones backed by Tata and Wadia Groups — explains the timing of the new venture. The pandemic has pushed the airline industry into its biggest ever existential crisis.

The Indian airline industry is seeing a big churn with Air India’s divestment process. The Tatas are widely seen as frontrunners to acquire AI and eventually have one mega carrier that merges all three — AI, Vistara and AirAsia India. IndiGo, despite Covid sending its net worth into negative territory, has a strong war chest and hundreds of planes on order waiting to take to the skies again once travel resumes. Other airlines are trying to raise funds to survive.

Bullish on India’s aviation prospects, the Akasa team was doing its groundwork during the entire pandemic in 2020. Jhunjhunwala is himself learnt to have spoken to key aviation professionals to know about the intricacies of starting and running an airline. “He just called sometime last year and introduced himself, while wanting to know about this industry,” said an industry insider. Dube has held senior positions at GoAir, Jet Airways, Delta and American Airlines in an over 30-year-long career. He has prepared the technical blueprint with a team of trusted colleagues that include some names from Jet 1.0. It remains to be seen whether Akasa takes to the skies before Jet 2.0.