Rakesh Jhunjhunwala Bets Big on Indian Aviation with Akasa Air

The good news for Indian aviation is that no less a person than Rakesh Jhunjhunwala is bullish on the sector. Known for his shrewd long-term bets on stocks like Titan, Rallis and Lupin; Rakesh Jhunjhunwala plans to put aviation industry in India in a new light altogether.

What the Big Bull plans in Indian aviation?

Rakesh Jhunjhunwala is planning to invest $35 million (Rs.260 crore) to launch an ultra-low-cost airline in India with a starting fleet of 70 planes. These plans are expected to fructify over the next 4 years. The proposed airline will be called “Akasa Air”. 

Rakesh is extremely bullish on the demand side of Indian aviation and expects the real growth to commence when flying truly becomes a mass product. That is only possible through an ultra-low-cost airline, which is what Akasa Air is supposed to be.

The first step is to get the aviation license, which they are expecting from the Ministry of Civil Aviation during Aug-21. The planes will be mid-sized aircraft with a seating capacity of 180 persons. Rakesh Jhunjhunwala has already zeroed in on a senior executive from Delta Airlines to drive business at Akasa Air.

Conscious of headwinds, but not deterred, says the Big Bull

Rakesh Jhunjhunwala has underscored that he is fully conscious of the headwinds in aviation today like flying restrictions, steep fuel costs, low load factor and negative spreads of RASK over CASK. However, all this is expected to normalize and Rakesh is confident that they have the business model and the alliances in place to tap what is going to be the world’s biggest aviation market. For an investor known for his unbridled optimism, the aviation foray will need mountains of optimism to make a difference.
 

Also Read - Big Bull Rakesh Jhunjhunwala's Portfolio 2021