Billionaire investor Rakesh Jhunjhunwala eyes 70 aircraft in 4 years

To invest Rs 260 crore for a 40% stake in low-cost airline

Markets may correct in the short term. But in a bull market the correction is always sharp, swift and short-lived: Rakesh Jhunjunwala

Billionaire investor Rakesh Jhunjhunwala is investing over Rs 260 crore for a 40 per cent stake in a low-cost airline promoted by Vinay Dube, Jet Airways’ former chief executive officer. Dube has put in place a team of senior executives in commercial, engineering and finance roles, and negotiations are underway with both Airbus and Boeing for an aircraft order. The proposed airline christened ‘Akasa Air’ is scheduled to start next summer and have 70 aircraft in four years.

Jhunjhunwala has already put in Rs 15 crore in the venture. The infusion was made earlier in the month and unsecured convertible debentures were allotted to his wife Rekha. Regulatory filings show that debentures would be compulsorily converted into equity shares of the airline immediately upon receipt of investment of Rs 247.5 crore from Rakesh Jhunjhunwala or his affiliates in the equity shares of the company within an agreed period. Jhunjhunwala hopes that the proposed airline will receive the initial NOC in 15 days, he told Bloomberg television. “For the culture of a company to be frugal, you’ve to start off fresh. I am very bullish on India’s aviation sector demand,” Jhunjhunwala said.

While demand for air travel has hit globally, India’s aviation industry is at greater risk of delayed recovery. That’s not deterring Jhunjhunwala. “I think some of the incremental players may not recover,” he said. Dube has roped in many of his former colleagues from Jet Airways and GoAir, where he served as CEO. Senior executives on board include Anand Srinivasan (chief information officer), Praveen Iyer (chief commercial officer), Bhavin Joshi (senior vice-president-finance and leasing) and Neelu Khatri (VP–government affairs). Belson Coutinho and Adam Voss, who headed marketing and engineering in Jet, are part of the initial team. “We are working with the aviation ministry to ensure we are compliant with all requirements and hope the NOC will be granted soon,” said Dube, director and CEO of the new airline.

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