Laxmi Prasad and his Interups Inc may be out of the reckoning for Air India, but the NRI entrepreneur has now given wing to his aviation ambitions by investing in Trujet, with plans that could put the regional airline alongside its bigger peers.
“We plan to expand services to the length and breadth of the country, overseas, and get into segments such as cargo, private charters and helicopter ambulance services. We will be operating in full scale,” Prasad told Moneycontrol.
The entrepreneur is backing his statements with money. “We had set aside $1.89 billion for the planned investment in Air India. That is not happening now. We would like to put that money in this investment now. This will be over the next three years,” he added.
Driving the plan will be a fleet expansion that will see Trujet catch up, or even go ahead, of the likes of AirAsia India, Vistara and even possibly GoAir. Prasad is also adding talent to Trujet to manage the ambitious plan.
Interups, which claims to manage assets worth $10 billion in the US, had on April 1 said it will buy a 49 percent stake in Hyderabad-based Megha Engineering and Infrastructure Ltd (MEIL)‘s Turbo Megha Airways, which operates regional carrier Trujet.
Trujet is in talks with Airbus and Embraer for an order of 54 aircraft each, with the agreement expected to be signed later this month.
With Airbus, the airline is in talks for the single aisle, A220 aircraft that has become popular during the pandemic for operational and fuel efficiency. Embraer will supply the E190-E2, which has a configuration similar to the Airbus aircraft.
“Embraer will supply three aircraft every two months. The arrangement with Airbus will see one aircraft coming in every 1.5 months, or a maximum of nine planes a year. So, it may take about six years for the Airbus order to be delivered, lower for Embraer,” Prasad said.
Trujet currently operates a fleet of seven aircraft, half of which are grounded. The Hyderabad-based airline has been operating at the fringes of the Indian aviation industry, and had a market share of 0.6 percent as of February 2021. Its market share was 0.7 percent a year earlier.
The expansion in its fleet will be visible later this year, says Prasad. “Airbus and Embraer have already identified some aircraft. And with the addition of these, it will take us to 21 almost immediately,” he said.
This will be important for the airline to comply with local regulations and start flying overseas. Though airlines no longer need to be in operation for five years to be eligible to fly overseas (as per the earlier 5/20 rule), they still need to have at least 20 aircraft to start international operations.
Among its peers, GoAir has a little over 50 aircraft, while Vistara has 45 and AirAsia India, 33. Industry leader IndiGo has the largest fleet, with 284 aircraft.
To help manage the expansion, Prasad is adding more talent in Trujet. “We will be fully involved in the management. We are deputing two people, an ex-CEO of Indian Airlines and a previous tech head of Indian Airlines, to Trujet,” Prasad said. He declined to reveal the identities of the two officials.
The entrepreneur’s plan will see Hyderabad emerging as a major aviation hub and home to over 100 aircraft. “I have an emotional connect with Hyderabad, as this is where I grew up,” Prasad said.
The businessman is also backing MEIL, Trujet’s parent, in its interest in Shipping Corporation of India, which is being divested by the government. Apart from this, Interups is also in the running for Lavasa and Reliance Naval, both stressed assets.