Industry officials believe that billionaire Rakesh Jhunjhunwala’s proposal to start an ultra-low-cost airline will give Boeing an opportunity to reclaim lost ground following the demise of one of its major customers, Jet Airways, two years ago.
Jhunjhunwala, also called as “India’s Warren Buffett” for his successful stock investments, intends to link up with former CEOs of IndiGo and Jet Airways to capitalise on domestic air travel demand.
While the aspirations to create Akasa Air come at a time when India’s aviation industry is hurting from the pandemic’s impact, with airlines losing billions of dollars, the sector’s long-term prospects make it a desirable market for planemakers Boeing and Airbus.
Also Read: Nations hope raised, know what is happening in Tokyo
“There will be a big fight between Airbus and Boeing,” said Nitin Sarin, managing partner at law firm Sarin & Co, which advises lessors and airlines.
“For Boeing this is a great opportunity to step in and up their game, considering they don’t have any other major operator for their 737 aircraft in India apart from SpiceJet,” Sarin said, referring to Boeing’s narrowbody aircraft.
Boeing did not comment on Akasa’s plans, but told Reuters that it is always looking for opportunities and talking to current and new clients about how it can best serve their fleet and operational needs.
Also read: Tokyo Olympics: Indian Kamalpreet qualifies for women’s discus throw final
Details of the partnership have not been made public, including any decisions on jet orders, but Mr Jhunjhunwala told Bloomberg that he plans to own a 40% stake in Akasa, which will have 70 planes with up to 180 seats in four years.
Jhunjhunwala, valued at $4.6 billion by Forbes, did not respond to an interview request.
Indian skies are dominated by low-cost carriers (LCCs) including IndiGo, SpiceJet, GoFirst and AirAsia India, with the majority of them operating a fleet of Airbus’ narrowbody planes.
(With inputs from Returns)
