Rakesh Jhunjhunwala, popularly known as India’s Big Bull and India’s Warren Buffet, is an Indian business magnate and stock trader. This billionaire manages his own portfolio as a partner in his asset management firm, Rare Enterprise. Jhunjhunwala is working to launch a budget airline with a fleet of 70 aircrafts over the next four years. The name proposed for the airline is Akasa Air. Also, big bull has approached to the aviation ministry to obtain a no-objection certificate (NoC) and is investing $35 million in this new project and will hold a 40% stake in the airline.
Last year, Warren Buffet’s (world’s most successful investor) Berkshire Hathaway sold a multi-billion-dollar stake from US airlines because of Covid to save themselves from the airline sector. Also, when Vijay Mallya entered the aviation sector, it was the beginning of the downfall. However, Jhunjhunwala’s case is different. With a net worth of $4.6 billion and investing only $35 million which is less than 1% of his net worth and being bullish on the aviation sector, investment in airlines is not a gamble for him, but a strategic bet.
Indian airlines, both domestic and international, has not a very smooth ride during and before the pandemic. Kingfisher and Jet airways both collapsed due to price pressure despite being the largest domestic players. Further, after the lockdown major players line Vistara, Indigo and SpiceJet find it difficult to recover their loses they incur during the global lockdown in this pandemic. “I think some of the increment players may not recover and I’ve got some of the best airline people in the world as my partners.”, Jhunjhunwala told Bloomberg Quint.
India being the fastest growing aviation market before pandemic and the weak financials of many Indian aviation players depicts a great timing of the move by Jhunjhunwala. Of course, the pandemic has plunged the Indian aviation industry in the biggest crisis. Entire lockdown Akasa team is doing the groundwork and Jhunjhunwala has ultra-low-cost airline plans to have a fleet of 70 aircrafts (with a carrying capacity of 180 passengers per flight) in next four years that strengthens the move further.
Tell me in comments if you like this information.
Now enjoy the fun of learning listening to my blog. Check the link below.
Coffee & Finance 