NEW KID ON THE BLOCK

AKASA AIR IS THE LATEST NO-FRILLS AIRLINE TO ENTER THE INDIAN MARKET. CAN ITS BACKER, FAMED STOCK MARKET INVESTOR RAKESH JHUNJHUNWALA, HELP IT NAVIGATE A NOTORIOUSLY PRICE-SENSITIVE MARKET?

- MANU KAUSHIK

LET’S SAY YOU plan to fly from New Delhi to Mumbai for a holiday before December. Currently, you can choose among all six pan-India carriers that fly that route, with all of their cheapest tickets at around ₹2,500. The closeness of the price range isn’t a surprise considering the cut-throat competition in the aviation industry, especially after airlines were grounded for months due to the Covid-19 pandemic.

By this time next year, there will hopefully be two more options— Akasa Air and Jet Airways 2.0. And if things go as per plan, Air India could go to a private entity, which would be raring to go. After the lull of the past 18-odd months, suddenly there’s action happening in the sector. The most astute investor of current times, Rakesh Jhunjhunwala, too, has taken the plunge, betting on one fact—the world’s second-most populous country is hugely under-penetrated in air travel. Munch this—just about 8 per cent of India’s population fly.

But why has Jhunjhunwala, who is often referred to as India’s Warren Buffett, ventured into a sector that has more case studies of failure than success? The catastrophic collapses of Kingfisher Airlines and Jet Airways, and their impact on the industry in the past decade, have taken significant sheen off the aviation business. It is truly a survival of the fittest balance sheet in India’s notoriously price-sensitive market, where the race to the top is via rock-bottom prices. A route Akasa plans to take by being an ultralow-cost carrier (ULCC).