Indian billionaire mulls investment in new ULCC – report

Billionaire Indian investor Rakesh Jhunjhunwala is reportedly considering plans to invest USD35 million in building a new ultra-low-cost carrier, to be led by a team of aviation professionals including former Jet Airways (JAI, Mumbai Int’l) chief executive Vinay Dube, two sources close to the investor told The Economic Times.

The project, tentatively dubbed “Akasa” – Bengali for the sky – plans to launch flight operations in mid-2022 and has applied to India’s Ministry of Civil Aviation for a no-objection certificate. Once obtained, the start-up would then concentrate on raising funds and drafting a strong business plan that aims for a summer 2022 launch.

Other members of the team appear to include Arvind Srinivasan, who is a former revenue management chief at GoAir (G8, Mumbai Int’l), and former Jet Airways vice president and ex-GoAir chief operating officer Pravin Iyer.

Popularly known as India’s Warren Buffet, Jhunjhunwala has been described as a risk-taking trader who has in past had shown an interest in the airline industry. In December 2014, in a bid to raise desperately needed cash, SpiceJet (SG, Delhi Int’l) sold a 1.4% stake in its shareholding to him for INR130.05 million rupees (USD2.1 million at the time). He has also held a stake of about 1% in Jet Airways.

The sources said that a group led by Dube had held an initial round of discussions with Jhunjhunwala and a foreign investor, who they declined to name. If a deal goes ahead, it would give Jhunjhunwala around a 40% equity holding in the new company.

“There is indeed space for a new, well-run low-fare airline. And remember, this one is being formed by seasoned aviation professionals,” one of the sources said.