Rakesh Jhunjhunwala bet big on Akasa, said its take-off changed the game

Barely a week before his demise, Rakesh Jhunjhunwala took centre stage at the launch of Akasa Air. Wheelchair-bound but full of beans, Jhunjhunwala interacted with passengers before the airline’s maiden flight from Mumbai to Ahmedabad.

“We are not a low-cost airline. We are a frugal airline. We would like to save money wherever possible,” he told fellow passengers last Sunday, expressing hope that Akasa Air would offer comfortable service.

“We have changed the game. Seeing our aircraft seats, IndiGo ordered new ones,” Jhunjhunwala had quipped, drawing titters from co-passengers and Civil Aviation Minister Jyotiraditya Scindia.

Jhunjhunwala infused over Rs 260 crore into Akasa Air, which also counts US-based hedge fund PAR Capital Management, stock market investor Madhav Bhatkuly, corporate lawyer Berjis Desai, and ex-chief investment strategist of Reliance Capital Madhu Kela as co-investors.

Akasa Air, which has been set up by Jet Airways’ former chief executive officer (CEO) Vinay Dube and his colleagues, has in its fleet two Boeing 737 MAX planes and plans to induct 72 more over four years. The airline currently operates on two routes – Mumbai-Ahmedabad and Bengaluru-Kochi.

“A lot of people question why I’ve started an airline. Rather than answer them, I say I’m prepared for failure,” the billionaire investor had said at an industry event in February. He recounted the observation last Sunday as well.

With a high-cost environment and weak balance sheets, airlines have struggled to give returns to investors.

Aviation consultancy CAPA – Centre for Aviation expects Indian carriers to lose $1.4-1.7 billion in 2022-23.

With a lower cost structure and new product and services, the airline hopes to get an edge over its rivals.

“It is extremely sad news. Shocked,” IndiGo former president and Akasa Air co-founder Aditya Dube said.

“We, at Akasa, cannot thank Rakesh (Jhunjhunwala) enough for being an early believer and putting his trust and faith in us to build a world-class airline. He had an invincible spirit, was deeply passionate about everything Indian, and cared greatly for the well-being of our employees and customers,” Akasa Air founder and CEO Vinay Dube said in a statement.

“He was not only an astute businessman, but also passionately invested in India’s growth story. He will be remembered for giving India its newest airline – Akasa Air – after more than a decade,” tweeted Scindia.