India’s newest budget airline Akasa Air, backed by ace investor Rakesh Jhunjhunwala, is up and flying.
Aviation Minister Jyotiraditya Scindia on August 8 flagged off Akasa Air's first commercial flight that departed from Mumbai for Ahmedabad.
Akasa Air received scores of wishes for a successful run but India's aviation climate looks a bit challenging. Jet fuel prices are sky high and the industry is still recovering from the coronavirus blow.
The global economic situation is hardly a comfort, as recession fears mount as the Russia-Ukraine war enters its sixth month with little signs of a breakthrough. The breakdown of already tense ties between the US and China, the world’s two biggest economies, over Taiwan couldn’t come at a worse time.
Jhunjhunwala has made his fortune on the stock exchange as a value share investor.
The 62-year-old's entry into the capital-intensive sector raised eyebrows, with many pointing to the chequered history of billionaire-backed airlines in the country as well as the daunting global economic outlook.
Fugitive businessman Vijay Mallya is fighting extradition from Britain on charges of financial fraud after his pet project Kingfisher Airlines went bankrupt in 2012, losing Indian banks more than $1 billion.
Disgraced entrepreneur Subrata Roy counted Air Sahara as a part of his empire for more than a decade, until consecutive losses forced a sale to fellow self-made billionaire Naresh Goyal's Jet Airways in 2007.
Jet collapsed in 2019, with many blaming the Air Sahara deal for its downfall.
"A lot of people question why I've started an airline. Rather than answer them, I say I'm prepared for failure," the billionaire said at an industry event in February.
"It's better to have tried and failed than not tried at all."
"I hope to prove people wrong," he said. "Now it's become a matter of ego,” said Jhunjhunwala, who has invested $35 million for an estimated 40 percent stake in the new airline.
The airline aims to have 18 aircraft within 12 months from the launch and 72 planes over the next five years.
In November 2021, Akasa Air, which goes up against airlines such as IndiGo and SpiceJet, ordered 72 Boeing737 MAX jets, valued at nearly $9 billion.(With inputs from agencies)