Rakesh Jhunjhunwala’s last interview: "Akasa Air is frugal, will be very competitive"

Rakesh Jhunjhunwala

Akasa Air is a frugal airline and will be very competitive in the aviation space, ace investor Rakesh Jhunjhunwala said on August 8, a day after the Mumbai-based company launched commercial operations.

Billionaire Jhunjhunwala, also known as "India's Warren Buffett", expressed confidence in the future of India's aviation sector.

"Our competitors are ordering new chairs in response to Akasa's chair," he told CNBC TV-18 in an exclusive interaction. Akasa will be competing with the likes of IndiGo and SpiceJet for a share of India’s fast-growing domestic air travel market.

There will be a lot more flying as discretionary spending per capita goes up, he added. Jhunjhunwala also cited civil aviation minister Jyotiraditya Scindia's prediction that India expects to reach 40 crore air travellers in the next four years.

Crediting the surge in the number of flyers, the 62-year-old noted that India's aircraft fleet size requirement will almost double by 2027 and it will need 1,200 aircraft.

Watch | Rakesh Jhunjhunwala trims stake in 10 stocks in quarter ended June

Speaking about the challenges in the aviation sector, Jhunjhunwala said he was "prepared for Akasa Air to even fail, but better to have tried and failed than not tried at all".

The Indian aviation sector is under pressure because of high jet fuel prices and high taxes due to which most airlines are reporting losses.

See | Photos and videos from Akasa Air’s first flight, featuring Rakesh Jhunjhunwala

The ace investor has teamed up with former chief executives of IndiGo and Jet Airways to launch Akasa, which loosely translates to sky.

"I hope to prove people wrong," Jhunjhunwala had said at an industry event in February. "Now it's become a matter of ego,”

He has invested $35 million for an estimated 40 percent stake in the airline, which aims to have 18 aircraft within 12 months from the launch and 72 over the next five years.

Also Read | Telecom not a good sector to invest; remain bullish on PSU banks: Rakesh Jhunjhunwala

Further, speaking on the sectors he is bullish on, Jhunjhunwala noted that India's telecom sector is not a good sector to invest in as it constantly requires investment.

Speaking to CNBC-TV18 about what other sectors apart from civil aviation interest him, Jhunjhunwala said that he is very bullish on hospitals, corporate sector banks, and public sector banks.

Speaking on the digitization landscape, Jhunjhunwala thanked Mukesh Ambani for the changes he has brought about in India. He said: “The low cost of communication whether in voice or in data is what has caused digitization in this country and we cannot thank Mr Ambani more for this; I think this country has to remain eternally grateful to him for what he has done to the telecom sector.”

While commenting on startups, Jhunjhunwala added: “There is more downside risk than upside opportunity in new age start-ups.”

The market veteran also said that "India is entering a golden period" and he expects the country's yearly GDP growth to be at 10 percent and added that the market will also grow at a slower pace. The business magnate projected that the IT services would grow at 10 to 15 percent for the next five years.

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