Rakesh Jhunjhunwala plans 70 planes for new airline, expects Aviation Ministry's NOC in 15 days

Ace investor Rakesh Jhunjhunwala is planning on having 70 planes in four years for a new airline venture that he has decided to back, Bloomberg reported on July 28.

Jhunjhunwala, while speaking to the news channel, said he expects a no-objection certificate (NOC) for the airline venture from the Ministry of Civil Aviation "in next 15 days".

Nearly 40 percent of the stake in the new airline, to be named Akasa Air, is expected to be owned by Jhunjhunwala. He is considering to invest $35 million in the venture, despite the aviation sector entering into a period of gloom since the onset of the COVID-19 pandemic.

Several carriers, including India's largest private operator IndiGo, have reported mounting losses. Owing to the second wave of the pandemic, IndiGo's Q1 FY22 loss widened to 3,174 crore.

Even before the coronavirus crisis, airline operators faced a stiff challenge in India despite the steep increase in the number of flyers. At least two major airlines - Kingfisher Airways and Jet Airways India - collapsed in the past decade. The latter was recently approved to resume operations.

Jhunjhunwala, however, is unfazed by the challenges. "I’m very, very bullish on India’s aviation sector in terms of demand," he told Bloomberg Television.

"For the culture of a company to be frugal you’ve to start off fresh," added Jhunjhunwala, who also heads the private equity and asset management firm Rare Enterprises.

This would not be the first time when Jhunjhunwala has invested in the aviation sector. He had owned over one percent stake in SpiceJet and had also owned one percent in Jet Airways.

Despite the threat of a third virus wave looming above aviation and other industries in India, Jhunjhunwala is of the opinion that the country may evade another brutal round of the pandemic due to the expansion of the immunisation drive.

Speaking to CNBC TV-18 earlier this month, he had said, "Nobody predicted the second wave and now everyone is talking about the third wave. With vaccination exercise picking pace and immunity growing, I don't think there is going to be the third wave. Plus, the economy is better-prepared now."