‘I hope to prove people wrong’: Rakesh Jhunjhunwala’s retort to sceptics of Akasa Air

Rakesh Jhunjhunwala

Veteran stock market investor Rakesh Jhunjhunwala was in a defiant mood as he laid down the gauntlet to the skeptics of his multi-million dollar investment in airline Akasa Air that is expected to start operations later this year.

“I am prepared for failure. I am surprised that people are surprised (by my investment),” said Jhunjhunwala, who was speaking at a Confederation of Indian Industry (CII) event on February 17.

The marquee investor has invested Rs 275 crore for a 40 percent stake in Akasa Air to build a new airline from the ground up in partnership with some other veterans of the Indian aviation industry.

Skeptics have raised questions over Jhunjhunwala’s foray into the space given the history of failed airlines in India and the low returns the sector has made globally. The development had drawn a myriad of responses on social media networks in India with the majority confounded by Jhunjhunwala’s decision to start an airliner.

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Responding to the critics of his airline venture, Jhunjhunwala said he hopes to prove them wrong as he proved his family wrong when he entered the Indian stock market more than three decades ago.

“Now it is a matter of ego,” the renowned investor said.

Jhunjhunwala sees his airline venture as being ‘frugal’ instead of ‘ultra-low cost’ and drew an analogy with European airline Ryanair to give a peek into his business plan. “I think I have got a business plan and you know Ryan Air was profitable from day one when other European airliners shut down,” Jhunjhunwala said.

Jhunjhunwala’s foray into the segment comes amid one of the toughest times in the history of aviation because of the COVID-19 pandemic. “I think aviation in India is going to grow from where it is today, and in an industry where everyone is losing money pricing has to improve,” he said.

Jhunjhunwala said that Akasa Air has ordered one-fourth of the planes that current industry leader IndiGo has in its fleet. Media reports have suggested that the infant airliner is luring staff from rivals with stocks options and other incentives.