NEW DELHI: Four airline companies, including SNV Aviation (Rakesh Jhunjhunwala-promoted Akasa Air’s holding company), have applied for no-objection certificates (NOCs) from the ministry of civil aviation to start scheduled air passengers services and air cargo services. Beside Akasa, the three other carriers are- Turbo Megha Airways (promoter of Hyderabad-based TruJet), Jet Freight Logistics and SpiceXpress & Logistics (the cargo arm of SpiceJet).
“Prospective operators are free to assess the aviation demand and participate with their specific business plan. (The) Ministry of Civil Aviation (MoCA) as a nodal ministry, facilitates an eco system to promote the aviation sector,” minister of state (civil aviation) VK Singh told the Rajya Sabha on Wednesday.
“As per the civil aviation requirements (CAR), interested airline operators apply to MoCA for obtaining NOC to operate scheduled passenger air transport services. Recently, (the) ministry has dispensed with the issuance of NOC for applicants of non-scheduled operators considering ease of doing business,” he added.
The most anticipated among the lot is billionaire Jhunjhunwala backed Akasa. Since his announcement that he is foraying into airline business, Akasa is seen as the next big thing in the Indian skies.
According to reports, the airline, which will operate as an ultra-low-cost carrier (ULCC), is in talks with aircraft manufacturer Boeing to buy as many as seventy 737 Max jets in four years. While Jhunjhunwala is investing about $35 million and hold about 40% stake, there are other investors as well. Akasa will also see the return of industry veterans such as IndiGo’s former president Aditya Ghosh and former Jet Airways chief executive officer Vinay Dube in the aviation business.
The two are reported to be co-founders of the airline. If everything goes as per plan, Akasa is expected to make its maiden flight by December this year.Entry of Akasa comes at a time when India’s aviation industry is ransacked by the Covid-19 pandemic. This has also raised questions whether it is a smart move by India’s very own Warren Buffett to start an airline, given two big names- Kingfisher and Jet Airways-- succumbed last decade.
In current times, India’s largest carrier IndiGo reported its biggest quarterly loss at Rs 3,174 crore in the June quarter. SpiceJet and GoAir (now Go First) are ladened with high debts and are looking ways to raise funds. Experts feel domestic airlines would continue to report losses in near future and it would take 3-4 years for the traffic to reach pre-Covid level in the country. Jhunjhunwala, however, is very bullish on the sector.