Big Bull Jhunjhunwala’s Akasa Air places order for 72 Boeing 737 MAX planes

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Billionaire investor Rakesh Jhunjhunwala-led low-cost airline Akasa Air has placed an order for 72 Boeing 737 MAX jets to launch its operations.</p>
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Akasa Air had said last month it expects to start flying next year after getting initial clearance from the civil aviation ministry.</p>
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For Boeing this comes as a big opportunity to gain market share as it does not have any other major operator for its narrowbody 737 aircraft in India apart from SpiceJet.</p>
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The Directorate General of Civil Aviation had in August allowed the country's airlines to fly the Boeing MAX jet which had been grounded worldwide for nearly two-and-a-half-years after two planes had crashed in quick succession due to the same software failure.</p>
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The disastrous crashes had taken place in five months killing 346 people, plunging Boeing into a major crisis. However, the modified 737 MAX has now been cleared to fly again in 175 countries including the USA and Europe Union.</p>
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While Jhunjhunwala's plan to launch Akasa Air comes at a time when airlines are piling up losses due to the crippling effect of the coronavirus pandemic, it is the aviation sector's long-term prospect that he appears to be focused on. He will also be looking at sourcing planes at a low price due to the recession in the industry.</p>
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Jhunjhunwala is referred to as the “Warren Buffet of India” because of his successful stock market investments and is valued at $4.6 billion by Forbes.</p>
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Details of the Akasa venture have not been fully disclosed, but Jhunjhunwala told Bloomberg he plans to have a 40% stake in the low-cost airline, which will have 70 aircraft of up to 180 seats within four years.</p>
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Akasa's other co-founders are Aditya Ghosh, who has worked with IndiGo and played a key role in the airline’s early success, and Vinay Dube, a former CEO of Jet who has also worked with Delta.</p>
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Indian commercial airlines are dominated by low-cost carriers including IndiGo, SpiceJet, GoFirst and AirAsia India, with the majority of them operating a fleet of Airbus's narrowbody planes.</p>
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These airlines also have over 900 planes on order of which 710 are Airbus while only 185 are Boeing 737 aircraft.</p>